The Protection Gap – the difference between economic losses associated with insurable events and the amount of insurance pay-out. Unfinished business for the insurance industry – but everybody is talking about it – at least in the UK recently. In the space of a single week, I was lucky enough to be presenting Swiss Re's views at three high octane, but very different events. Closing the protection gap was a focal point for them all.
Firstly, I was invited to join a meeting hosted by the UK Government in the House of Commons. The Government sought inputs on, and discussing, the G7 InsuResilience project…. The aim of the initiative is to grant 400 million more people access to insurance protection for climate events by 2020. A key recommendation emerging from the talks was to establish a Technical Advisory Facility - made up of Ministers of Finance and Insurance experts. This facility would guide country Governments assessment and decision making for climate insurance initiatives. Contributions by a colleague from Munich Re and the Director General of African Risk Capacity stimulated a great discussion with Members of Parliament, Lords and Ladies and various NGO's. A hard reality check on the need for collaboration emerged – all parties realising that no single entity can make this happen on their own.
The second event was the Financial Inclusion Forum who held a session with Swiss Re, Leapfrog and Worldvision to look at the insurance opportunity in the world of the financially excluded, or recently included. Two main conclusions emerged …. If micro credit is the "car", then personal insurance for disasters are the "seatbelts and safety features": One should not be sold without the other. Plus, we must think really BIG in order to scale up successful pilots and initiatives… and… wait for it: Collaboration will be clearly needed!
The final event, was the "Guardians of the Future" conference, hosted and organized by The Economist, a one day event with many leading experts from insurers, technology firms and banks – all looking at the protection gap together. A clear theme emerged – the supply of (innovative) insurance solutions, expenditure, knowledge and capital is plentiful, globally. The "secret sauce" is stimulating demand for our products, and building trust with these new clients…. And - can you guess it? Collaboration will be key.
Closing the protection gap needs a monumental effort – but we do need to make the world more resilient! Swiss Re is committed to putting our knowledge and capital to work,innovatively, together. Ex-ante action beats ex-post as we help the world rebuild, renew and move forward. Let's do it!
Category: Climate/natural disasters
Location: London, United Kingdom