Insurance Europe urges policymakers & public to collaborate to tackle protection gaps
Speaking at the 12th International Insurance Conference, in Prague, Andreas Brandstetter, Insurance Europe president, urged policymakers, insurers and the public to work together to address the significant protection gaps that exist in societies and economies.
Brandstetter stressed the need for policymakers to ensure that regulatory frameworks are fit for purpose and that rules do not act as a barrier to either the protection insurers offer, or their capacity to invest in the economy.
He also highlighted that rules must not unnecessarily discourage insurers from using tools, like artificial intelligence and the increased volume of available data, that can help to further reduce protection gaps.
The CEO and chairman of UNIQA Group, outlined three common areas where protection gaps exist.
These include a lack of pension provision, lack of cover for natural catastrophes and lack of cover for cyber risks.
According to Brandstetter, the further development of multi-pillar pension systems — where insurers play a key role as providers of second and third pillar pensions — could help to make national pension systems more sustainable.
However, to achieve success, policymakers must be clear that the public needs to save more for retirement, and then encourage them to do so through tax incentives, pension tracking services or auto-enrolment.
On natural catastrophe risk, Brandstetter mentioned that policymakers must do their best to limit climate change, which is already significantly increasing the frequency and severity of natural catastrophes. At the same time, it is vital for urgent steps to be taken to adapt societies to an already changing climate.
While the primary responsibility for this lies with public authorities, insurers can also help these adaptation efforts via their extensive cutting-edge modelling capabilities and, where possible, the public should take steps to make their homes more resilient to natural catastrophe events.
Awareness about the need to protect against cyber risks is increasing but more needs to be done, according to Brandstetter. Insurers can play a role, and an increasing number are making products available.
Yet, they face obstacles; in particular, the lack of data available to model and price the risks which limits the development of the market.
To aid in this situation, policymakers can address this by allowing insurers access to cyber incident data in an aggregated and anonymised format. This would help insurers to increase their modelling capacity, and therefore the protection they can offer.