Swiss Re believes insurers can improve societal resilience

By William Girling
In a recent press release, Swiss Re stated its belief that the economic straits caused by COVID-19 disruption were an opportunity for insurance...

In a recent press release, Swiss Re stated its belief that the economic straits caused by COVID-19 disruption were an opportunity for insurance.

Noting that the pandemic is expected to lower global resilience by 20% in 2020, the result of “countries' fiscal and monetary headroom” being adversely affected, the company approximates that the insurance protection gap across three segments (mortality, health and natural disaster) will reach US$1.24trn.

Among those countries which are to be hit hardest - the article speculates these to be Japan, the US and the UK - Swiss Re that the government-sanctioned spending which was necessary to sustain the lockdown could ultimately hinder future development significantly.

“A focus on replenishing resilience by reinstating fiscal and monetary buffers, through structural reforms to improve long-term growth prospects, will be critical,” said Jerome Jean Haegeli, Group Chief Economist.

Addressing protection gaps

Far from being equally affected, the company’s research indicates that natural disaster resilience will be least exacerbated, with health resilience remaining relatively stable despite some deterioration. 

However, health and mortality protection gaps are expected to widen noticeably as households are strained by unemployment, lower income and generally more expensive healthcare costs.

Despite this, Haegeli is adamant that the insurance industry can step in as a force for good during this time and improve people’s quality of life:

“The widening global protection gap is a huge opportunity for insurers to fulfil their mandate as risk absorbers and improve societal resilience. 

"In times of crisis, households need risk protection. Insurance is a key tool to help households reduce their financial vulnerability in disruptive environments."

Assessing economic health

Swiss Re’s ‘Macroeconomic Resilience Index’ was launched to easily convey the resilience of countries using the aforementioned criteria (natural catastrophes, mortality and healthcare). 

According to its research Switzerland, Canada and Finland rank consistently in the top three ‘most resilient’ in terms of economic strength converging on the ability to withstand shocks.

Image courtesy of Swiss Re

Share

Featured Articles

The life insurance policies of history's most famous people

With the help of insurers Aviva and Zurich, we've delved into the archives to uncover the life insurance policies of some of history's most famous figures.

How can insurers respond to rise in natural catastrophes?

How can insurance companies respond to the rising prevalence of natural catastrophes, or so-called 'nat cat' events, as a result of climate change?

InsurTech glossary: top 50 most common phrases in insurance

The insurance industry is full of confusing terms and phrases. That's why we've compiled a handy, jargon-busting glossary of the most commonly used.

Top 10 Scaling Insurtech Startups to Watch in 2022

Insurtech

Why Cybercrime is Driving Change & Innovation in Insurtech

Insurtech

Three Key Trends for Insurtechs Driving Innovation in 2022

Insurtech