A new report from Swiss Re Institute has highlighted how there is a lack of inclusion within the life and health insurance markets.
According to the report, accessibility is said to be the biggest factor behind a lack of inclusion in emerging markets, with Swiss Re noting that this is driven partly by lower financial literacy as well as lower usage and trust in the financial services sector.
At the same time, the report shows that advanced market consumers are facing fewer barriers to obtaining insurance, however higher incomes in advanced economies are not necessarily translating into higher levels of insurance affordability.
While life insurance inclusion levels in the US are highest among the markets that were assessed for the report, the availability of insurance helped offset relatively lower scores for accessibility and affordability.
In emerging markets, inclusion was the highest in South Africa, where a robust showing in the availability and accessibility dimensions offset low marks for affordability.
Swiss Re stated that improving insurance inclusion demands a multi-faceted approach, that starts by having a better understanding of consumer needs via market research prioritising underserved communities.
The report also added how re/insurers need to begin to explore novel strategic partnerships to foster distribution diversity and use digital technology to achieve scale and drive footprint.
Melissa Leitner, Head Sustainable L&H Delivery, said: “The L&H Insurance Inclusion Radar is a new resource calibrated to help steer our industry toward new sources of growth by better serving the needs of people who are particularly vulnerable to financial hardship.”
Julien Descombes, Head Life & Health Products Reinsurance, commented: “By making life and health insurance more available, accessible, and affordable (the Inclusion Radar’s 3As), families and households will be better equipped to withstand financial challenges that occur when a breadwinner passes away or when they incur healthcare treatment costs. Making insurance more inclusive helps create a stronger, more resilient society.”
Jérôme Jean Haegeli, Group Chief Economist, added: “The research comes as the global economy is slowing and social inequalities have increased enormously on the back of the uneven recovery and highest inflation surge in 40 years. Life and health insurance is a powerful remedy, providing families with financial relief after tragedies and by covering healthcare costs. Insurance covers are key to fostering economic and social progress with more focus needed now on inclusion to narrowing protection gaps in life and health.”
