Insurance is great, let's make it even greater in the future- for more people

Much of what is discussed within the media regarding insurance remains grounded within the industry of the First World and incumbent concepts of risk management and is focused on P&C, life, and wealth transfer products. Indemnity protections and shared risks dominate the discussions. Innovation and Insurtech have the traditional aspects of insurance within their sights. As such the discussions of the past, present, and future of insurance are in essence and in great part a continuation of the trajectory of insurance services designed over decades or centuries.

A recent article by industry influencer Matteo Carbone does within several pages well-describe how and where the insurance industry of the future will find success in maintaining the insurance service trajectory- connected, fair, and personalized, and place a premium on prevention. In those concepts, I have no disagreement.

Insurance in the incumbent world has become almost a zero-sum game, with scant room for significant expansion of traditional markets and products. The auto/motor market won't double in ten years, nor the volume of developed real estate. Property values will grow but the policies in force will not increase at a similar rate as sum assured. Prevention will clamor to move from the passenger's seat to a share of driving duties. Connectivity will make risk and risk mitigation more timely. Insurance professionals will continue to be a key aspect of the market, perhaps even more so as the evolution of operations from being led by carriers to being the entry point to customers becomes more clear through agency integration with technology advances focused on service.

All this is on point, my good friend Matteo has his finger well-placed on the industry's pulse.

But what of the unspoken opportunities and gaps the industry and populations face? Insurance remains as the fable of the elephant and the blind men, with one's views dominated by the part of the insurance beast one touches.

The future of insurance must be cognizant of the entire need the global community has in terms of insurance; it's not just a first-world concern. There are some billions of persons and businesses that are underserved in access to and availability of insurance products. The most basic needs of risk mitigation cannot be met in large swaths of the globe and this affects the industry at large. The economics of the globe are so intertwined that the effects of the absence of effective and available insurance lines in Africa, Latin America, India and elsewhere have collateral effects on all markets.

The future of insurance must see its effects being felt in underserved markets; growth in the industry cannot be solely within existing markets, it must be found in micro-credit policies in Hyderabad or bancassurance offerings in Sao Paulo, or pay as you go motor cover in Lagos. Engaging the billions of underserved and eager customers cannot be an overlooked part of the future. Prevention is a luxury concept when basic protections are absent. Personalization is the pathway when access to insurance products are solely from a smart device. Connectivity has a different connotation when the only means of access is through an app. Fair is simply accessing products.

Is access a challenge in first-world markets? I say yes if the question is framed in terms of coverage gaps. Consider the multi-trillion-dollar effect the pandemic exacted on the global economy due in great part to the failure of risk products in providing benefits for business interruption due to the Covid-19 cascading effects. Traditional insurance cannot in its traditional indemnity approach provide coverage for systemic economic risk. But is that the concept the industry should take into the future? How about intangible asset risk that exists on every major corporation's balance sheet? Is the future of insurance to remain in the realm of indemnity products? What of decentralized finance initiatives and the advent of influence cryptocurrency exhibits? Are tokenized assets planned for coverage as the class increases in volume, both in count and value? Is connectivity to be the inroad to ubiquitous cybercrime, and what does the industry present for addressing immediate risks and cascading cyber risks? How will risk financing craft an attractive target for the $175 trillion of available capital? Can indemnity concepts play nice with the promise and flexibility parametric options present? Will there be sufficient volumes of trained insurance professionals to ensure needed service is provided? Will newly opened markets respond well with service to build trust within the customers' eyes?

I support the path insurance is taking but suggest perspectives must be broadened to address the future Insurance Elephant. Billions of new insurance customers will be a tide that lifts the entire industry and ensure a solid insurance future.