{"id":7331,"date":"2019-04-15T22:48:25","date_gmt":"2019-04-16T01:48:25","guid":{"rendered":"https:\/\/insurancecorp.com.br\/pt\/?p=7331"},"modified":"2019-04-15T22:48:25","modified_gmt":"2019-04-16T01:48:25","slug":"closing-the-protection-gap-through-partnership-and-technology","status":"publish","type":"post","link":"https:\/\/insurancecorp.com.br\/pt\/2019\/04\/15\/closing-the-protection-gap-through-partnership-and-technology\/","title":{"rendered":"Closing the protection gap through partnership and technology"},"content":{"rendered":"

By: Moses Ojeisekhoba, CEO Reinsurance Swiss Re<\/em><\/h4>\n

The devastation of a natural disaster knows no boundaries and obeys no laws. The only certainty we have from an earthquake or a hurricane is that what happens in the days immediately following can dramatically affect the longer-term course of recovery. <\/span><\/p>\n

For developing economies one of the biggest risks is that a country already in crisis will lack the means to maintain vital services and plunge even deeper into a painful, protracted struggle to rebuild.\u00a0<\/span><\/p>\n

But it doesn\u2019t have to be this way. The Caribbean Catastrophe Risk Insurance Facility (CCRIF) is paving the way to resilience, using parametric triggers for fast payouts that help maintain basic government functions and improve cash flows. The CCRIF is the first multi-country risk pool in the world and provides protection for 19 member governments. Payouts after hurricanes Maria and Irma were received in under 14 days. CCRIF and similar partnerships are helping close the global protection gap \u2013 the difference between total economic losses and insured losses.In the last 10 years, total economic losses outpaced insured losses by almost USD 150 billion annually. While the problem of underinsurance may seem daunting, it presents a compelling opportunity for our industry to make a difference in developed and emerging markets alike. <\/span><\/p>\n

Consider that a third of vehicles on the road in Brazil lack motor insurance because mandatory coverage is limited to bodily injury liability. Brazilian agriculture is also largely uninsured, at around 90% – another alarming figure considering this sector is responsible for 20% of the Brazilian GDP.<\/span><\/p>\n

Economies like Brazil’s are especially vulnerable because uninsured individuals often don\u2019t have the reserve funds to repair or rebuild. The protection gap only widens as populations increase, people live longer, they accumulate more assets and trends like rapid urbanization concentrate more assets in areas prone to natural catastrophe. On top of this, climate change and the accompanying more frequent and severe events exacerbates the problem. <\/span><\/p>\n

Human behavior also contributes to the protection gap. Many of Brazil\u2019s consumers have never owned an insurance policy and don’t understand its value. Our industry can do a better job of anticipating and responding to basic human needs rather than marketing products that are too aspirational, complex and often deemed unnecessary. <\/span><\/p>\n

The most vulnerable communities and their residents deserve improved access to insurance, so we should make it more affordable and educate them about its benefits.<\/span><\/p>\n

Re\/insurers, governments and multilateral organisations also need to develop stronger partnerships to widen the reach of insurance coverage. Fortunately, technology is a powerful ally to break down traditional barriers.\u00a0 <\/span>Innovation can help increase affordability, raise product awareness, expand distribution and improve coverage through more accurate pricing of risk. At Swiss Re, we\u2019re using technology to help our clients create innovative solutions: <\/span><\/p>\n