Mind the Gaps
It took thousands of years for the world’s population to surpass 1 billion in the early 19th century. It took only 12 years for the world’s population to grow from 7 billion to 8 billion between 2010 and 2022.
Our planet continues to change at dizzying speed. These changes are triggering new challenges across the globe. Notably, rapid changes are causing gaps in protection, which have significant consequences for the well-being and financial resilience of individuals, businesses and society.
The Global Federation of Insurance Associations (GFIA) recently completed a first of its kind study to identify and quantify the largest global protection gaps. GFIA’s research report highlighted four critical gaps, led by a $1 trillion global pension protection gap. Other gaps identified were a $0.9 trillion protection gap for cyber, a $0.8 trillion health protection gap, and a $0.1 trillion protection gap for natural catastrophes.
I recently discussed GFIA’s protection gap report on a video conversation with Michaela Koller, GFIA Secretary General and Director General of Insurance Europe and Tim Grafton, GFIA Vice President and Chief Executive of the Insurance Council of New Zealand.
“The size of the gaps in financial terms is absolutely staggering,” Tim said.
But they aren’t insurmountable. The GFIA report identified several actions that lawmakers and private industry can take to lessen the gaps. For example, insurers are already taking several steps to address the pension protection gap, including developing innovative and flexible savings products, emphasizing the importance of saving for retirement, and encouraging automatic enrollment in retirement plans.
Still, insurers can’t do it alone. In a recent video that focused on the pension gap, Sarah Hobbs, director of policy at the Canadian Life and Health Insurance Association, emphasized that close collaboration between public and private stakeholders is essential in order to adequately tackle these challenges.
Added Michaela: “It is clear that increasing the protection of individuals and businesses must be a shared responsibility. We look forward to discussing the findings of the report with policymakers and to working with them to reduce the gaps.”
Indeed, the GFIA report brings together the global community’s best thinking and examples of constructive solutions from around the world. We hope it will lead to significant cooperation and collaboration between policymakers and industry leaders to find solutions.