Insurance executives in the Asia Pacific region are less inclined than their global counterparts to view closing the US$1.8 trillion (£1.4 trillion) protection gap as an ethical obligation.
This is according to a new study by SAS and Economist Impact, surveying over 500 insurance leaders across 17 countries.
While 79% of global executives believe the industry has "an ethical obligation" to close this protection gap – the difference between insured and uninsured losses – only 72% of Asia Pacific executives share this view.
This seven-percentage-point difference reveals regional variations in how insurance leaders perceive their responsibilities in addressing the growing global protection gap.
The findings come at a critical time when climate-related disasters continue to escalate worldwide. In 2024 alone, catastrophic fires, flooding, storms, and earthquakes resulted in £289 billion in global economic losses, with a staggering 60% of these losses remaining uninsured.
Despite the lower sense of ethical obligation among APAC executives, the survey indicates broad agreement on the business potential of addressing the protection gap. Three in four insurance leaders (76%) globally consider closing the protection gap a "significant" business opportunity, especially as climate change losses mount.
Technology emerges as the primary solution path across all regions, with 48% of executives identifying the use of technologies to make insurance products more affordable as the most effective approach to narrowing the protection gap.
Other technology-driven solutions include developing innovative insurance products like parametric or microinsurance (42%) and leveraging data to better assess risks and design products (38%).
However, barriers remain. The survey shows that 77% of insurance leaders believe a lack of trust in the industry hinders efforts to close the protection gap. Additional obstacles include limited understanding of consumer needs (76%), outdated technology systems (75%), and organizational silos (74%).
"With a £1.4 trillion global protection gap and mounting challenges, from climate change to fraud and cyber threats, the industry stands at a crossroads,” said Sabine VanderLinden, CEO and co-founder of Alchemy Crew.
What are your thoughts on closing the protection gap? Share your comments below.
