- Insurers are not doing enough to meet societal responsibilities – A strong majority (80%) of respondents agree that insurers have a duty to contribute positively to society, with all regions in equal agreement, yet only 55% agree that insurers are fulfilling that role. Overall, intermediaries are slightly less convinced that insurers are contributing (53%, compared with 56% of insurers, with the biggest discrepancy between the two groups seen in North America, where those figures are 64% of insurers but just 36% of intermediaries.
- Regulation is hampering insurers' ability to meet consumers' needs – 70% of respondents agree that individuals will have inadequate private savings and pensions as a long-term consequence of new regulation, while just over a half (51%) believe that current regulatory and accounting rules encourage insurers to move away from guaranteed products, leaving individuals with the burden of investment risk. In response to changes affecting the industry, life insurers are offering fewer products (49%), limiting guarantees (40%) and raising prices (35%).
- Insurers are needed more than ever but are at risk of irrelevance – Over a half of respondents (54%) believe that regulation reduces insurers' ability to shift risk away from households and transform financial market risk into reliable streams of retirement income and other benefits – one of the industry's core functions. The same proportion believe that the burden will fall on governments to make up for individuals' private pension shortfalls, but almost half (45%) worry that they will not be able to afford to do so.
- Insurers need help to support developing countries and emerging economies – Nearly a half (45%) of respondents said that supranational organisations should prioritise working with developing countries to better inform policymakers of the value of catastrophe and other forms of insurance. Over half worry that, without adequate data, reinsurers may withdraw from providing catastrophe reinsurance in emerging markets (55%); and that if reinsurers pull back from these markets, individuals and corporates will be forced to go underinsured (52%). Respondents (57%) also fear that the absence of reinsurance will slow investment into emerging economies, which in turn will slow these countries' economic growth – a major concern, given the importance of emerging economies to pulling the global economy out of stagnation.
Insurance Industry Faces Challenges And Constraints As It Looks To The Future, According To New Study By BNY Mellon And The Economist Intelligence Unit
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