Most uninsured properties are located in areas where insurance in unavailable or unaffordable. (Credit: bilanol/Adobe Stock)
Among insurance executives, 78% believe the industry has an ethical obligation to close the $1.8 trillion global protection gap, according to a new survey from Economist Impact and SAS.
The protection gap — the difference between insured and uninsured losses worldwide — also represents a “significant” business opportunity according to 76% of those surveyed.
Climate change is driving an increase in catastrophic fires, flooding, storms and earthquakes, causing $368 billion in global economic losses last year. Of those losses, 60% were uninsured.
Most uninsured properties are either located in high-risk areas where insurance is unavailable or unaffordable. Trust is also at issue.
"Three-quarters [77%] of insurance leaders identify lack of trust in the industry as a significant barrier to closing the protection gap, and it's no wonder why," said Franklin Manchester, principal global insurance advisor at SAS, in a statement. "As carriers retreat from disaster-prone areas and data privacy violations are revealed, insurers must act decisively to regain consumer and regulator confidence.”
The survey found most executives see technology as the way forward, including:
- Using technologies to make insurance products more affordable: 48%
- Developing innovative insurance products like parametric or microinsurance: 42%
- Engaging with regulators via insurance organizations: 38%
- Leveraging data to better assess risks and design products: 39%
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