The world economy has become less resilient, but the insurance industry is keeping pace with changes in the risk landscape. Nevertheless, the newly developed SRI Insurance Resilience Indices, based on measures of protection needed relative to that available, show a huge opportunity for the insurance sector to close a combined record protection gap of $1.2 trillion in 2018 premium equivalent terms, in three main risk areas: natural catastrophe, mortality and health care. Swiss Re estimates that closing this protection gap would improve global financial resilience for policyholders by more than $1 trillion each year.

Insurance resilience indices measure the difference between needed and available protection.

The new Insurance Resilience Indices are based on measures of protection in place relative to protection needed between 2000 and 2018. These indices consider how insurance helps households withstand financial shocks from:

1. Natural catastrophes;
2. Death of a breadwinner; and
3. Catastrophic health care spending.

Insurance resilience for these three core risk areas has improved in most regions since 2000, indicating the insurance industry is keeping pace with the growing risk landscape. At individual peril level, we observe an increase in advanced market resilience to natural catastrophe risks (+ 8 pts), and a strengthening of mortality protection in the emerging markets (+9 pts). Notable also is the progress made in closing the health protection gap in the Asia Pacific.

However, average RIs are much lower for emerging economies, and there has been a marginal decline in the global all-peril insurance index. This is because the fast-growing emerging regions, with lower levels of insurance penetration, have garnered a higher weight in the world economy, which has weighed on the global index.