Global economic growth is expected to recover this year after the pandemic-induced recession in 2020. This will help to build macroeconomic resilience again, but there will not be a return to pre-Covid-19 levels of resilience in 2021. The global insurance protection gap reached a new high of around US$1.4 trillion in 2020, yet global insurance resilience is expected to grow in 2021 due to increased risk awareness.
Jérôme Haegeli, Swiss Re Group Chief Economist, commented: "Our study clearly shows that economic resilience pays off. Advanced regions benefitted from both stronger levels of macroeconomic resilience and health insurance resilience than their emerging counterparts. However, to restore macroeconomic resilience and drive long-term growth, deep structural reforms are needed.”
Key findings of the report include:
- Global insurance resilience is expected to strengthen in 2021, underpinned by rising risk awareness. For many people, the Covid-19 experience has highlighted the importance of risk protection covers.
- The combined world protection gap for health, mortality and natural catastrophe risks reached a new high of around US$1.4 trillion in 2020 amidst the pandemic crisis.
- The global SRI Health Resilience Index weakened slightly in 2020. Emerging markets with lower health resilience were most vulnerable. The global health protection gap widened to US$747 billion in 2020, 63 per cent of which derived from the emerging markets.
- Mortality resilience weakened due to a drop in financial assets and growing household debt amidst the pandemic crisis. The global SRI Mortality Resilience Index slipped to 45.8 in 2020 from 47.5 in 2019.
- Global natural catastrophe resilience remains the lowest of all, with the global index reading at 24 per cent in 2020, meaning that 76 per cent of these protection needs around the world are uninsured.
Pandemic accentuates gap between rich and poor
"The global pandemic has accentuated the gap between the rich and poor. It has laid bare the need for governments to focus on rebuilding and promoting social cohesion,” Haegeli added. “Social equity – and at its heart, creating equal opportunities for all – will be a defining feature of a more resilient world. The global insurance protection gap reached a new high of US$1.4 trillion. Closing this gap would both support long-term economic stability and increase society's capacity to absorb shocks. Making insurance more widely available and affordable will be essential. But re/insurers and leaders in business and government must make resilience a shared priority."