In 2023, insurance resilience either increased or was stable across the natural catastrophe, crop, health, and mortality perils tracked by Swiss Re’s Resilience Index.
According to the firm, this reflected a general focus on the shock-absorbing role of insurance for households, farms, and businesses.
“In 2023, we saw signs of individuals and policymakers worldwide recognising the benefit of higher insurance protection and taking steps to increase insurance coverage, and hence resilience,” Swiss Re explained.
As a figure, global insurance resilience was reportedly stable at 58% in 2023.
However, the global protection gap across the perils above reached a new high of $1.83 trillion in premium equivalent terms in the year.
Swiss Re observed that the global protection gap is up by 3.1% in nominal terms from a restated $1.77 trillion in 2022, and has grown by 3.6% annually in nominal terms since 2013, roughly matching nominal GDP growth trends.
Looking at natural catastrophe resilience alone, Swiss Re’s index observed an increase to 25.7% in 2023.
The reinsurer noted that 2023 featured a high proportion of severe convective storms, especially in the US, a relatively more insured peril than others.
“However, three-quarters of global disaster exposure is not protected by insurance. The protection gap was $385 billion in premium equivalent terms, up by 5.2% year-on-year. The past 10 years have seen improvement in global natural catastrophe insurance resilience,” Swiss Re said.
However, as per the reinsurer, the key driver has been a strong rise in advanced markets resilience, which increased to above 38% in 2023 from around 35% in 2013.
Meanwhile, resilience in emerging markets is typically extremely low, and regions are almost entirely unprotected from natural catastrophe risk.
