Recognized may be pattern of risk transfer from institutions to individuals across financial services settings; issued The Great Risk Transferreport as part of campaign.
Report highlighted recommendation that UK GVT, in consultation with UK IFoA, other technical and industry experts, determines appropriate minimum level of insurance protection needed by all to be financially resilient to specific risks, unexpected shocks.
Roundtable Questions
To launch the second part of the Great Risk Transfer campaign, UK IFoA, in partnership with WPI Economics, convened a roundtable to discuss this recommendation in more detail and consider how a minimum level of insurance provision could be realized.
Brought together academics, industry experts, consumer advocates; addressed questions on types of insurance cover that are essential for financial resilience.
To what extent is low take up a supply side or a demand side issue?
What levers can government, regulators pull to increase take up of insurance to defined level? What is the role of mandation? How has this worked in other spaces?
And how can insurers be supported to take on risks that they would not currently?
Key Issues
Discussion helped to shine a light on some key issues around establishing a minimum level of insurance protection, and a series of potential areas for further exploration.
UK IFoA plans to take forward and further explore a number of these, including the interaction between aggregating demand and risk sharing: how can re schemes and mandation or defaults complement each other to address issues around low take up.
By creating a bigger pool of risks, boosting demand for insurance products through mandation or defaults can help address concerns about adverse selection.
Combination of these interventions may be a strong route for improving access to protection insurance, where there are concerns over low take up / adverse selection.
Second, how to take product-based approach to defining minimum standards: product by product, how to determine minimum protection level for different groups of people.
Establishing minimum level of protection society aims to achieve is required before introducing strategies to address take up - one of which could be mandation.
Retirement Living Standards developed by UK PLSA could be an important example.
Third, strategic risk management, insurance take up: must integrate the management of underlying risks society faces into the thinking about insurance take up.
Could include considering how to do this across climate change, cyber risk, other risks.
Flood Re already looks to do this as part of its various transition activities.
And fourth, social dialogue, essential products, risk pooling: many questions addressed in roundtable are values-based decisions for society as a whole, not commercial or technical, so ways to engage the public should be considered, e.g. citizen assemblies.
Regulators
UK IFoA
Entity Types
CNSM; Corp; IB; Ins
Reference
PR 4/15/2024; Mt 12/6/2023
Functions
Actuarial and Valuation; C-Suite; Cyber; Environment; Reinsurance; Risk
