Umbrella insurance body stresses need to address protection gaps
Source: Asia Insurance Review | Apr 2023
Narrowing protection gaps has become even more important due to the rise in recent years of four global mega trends that affect them either directly or indirectly, according to the Switzerland-based Global Federation of Insurance Associations (GFIA).
In a report titled ‘Global protection gaps and recommendations for bridging them’, GFIA said that the mega trends cause dynamic changes in the risk landscape, giving rise to new, rapidly increasing risks and reinforcing existing ones, thereby affecting global protection gaps.
The four mega trends are climate change, technological acceleration and the use of data; changing demographics leading to ageing populations, and disruptive developments in macroeconomics and politics.
Four protection gaps that are particularly relevant due to their size, global presence, impact on lives and livelihoods, and expected evolution, are:
- Pension protection gap ($1tn annual gap)
- Cyber protection gap ($900bn)
- Health protection gap ($800bn)
- Natural catastrophe protection gap ($100bn)
GFIA said that it has produced the report to promote greater understanding of the largest protection gaps faced by individuals, businesses and societies globally. The report examines the drivers of the most relevant protection gaps and provides an overview of the wide range of potential levers that could help reduce each of the gaps.