The rise of advanced technology can assist with the development of insurance and reinsurance solutions that meet the changing demands of clients in all parts of the world, ultimately helping to bridge the global protection gap, according to an announcement by reinsurance giant Swiss Re, at the annual reinsurance meeting in Monte-Carlo.
The global reinsurer says it sees growing demand for new reinsurance solutions that enable customers to better manage their portfolios and grow into new markets and business lines, a trend that is being ushered and accelerated by technological advancements.
“Insurers are rethinking their business models to tap into new opportunities and better service the end-consumer. The reinsurance industry can help them with ready-to-use services and solutions that address growth and profitability,” said Swiss Re’s Chief Executive Officer (CEO), Christian Mumenthaler.
While variant in terms of both frequency and severity, annual global insured losses from natural catastrophe and weather events remains just a portion of the overall economic loss, which places substantial financial strain on economies in both developed and emerging markets.
According to analysis and estimates by the Swiss Re Institute, in 2016 alone, protection gaps (disparity between economic and insured loss post-event) around the world attributable to weather events and natural catastrophe events totalled $180 billion.
“Innovative solutions help the industry make progress towards closing the ever-growing global protection gap. As we have seen again in the aftermath of recent floods in the US following Hurricane Harvey, as well as devastating flooding in Bangladesh, India, and Nepal, the protection gap is very real and needs to be tackled with solutions that make insurance both more widely and more easily available,” continued Mumenthaler.
The protection gap is viewed across the risk transfer space as both a great challenge and opportunity, and Swiss Re feels that harnessing the power of technology and in-depth risk research can help to close the gap.
At the same time, technological advances can help companies enter new markets and new business lines, believes Swiss Re, ultimately increasing insurance penetration while supporting the profitability and diversification requirements of insurers and reinsurers.