“Just as our sector’s own employee and customer base is changing, so is the wider society we serve in quite profound ways that will affect the products we offer and environment we operate in.”
Those were the words of Association of British Insurers (ABI) director general Huw Evans, who believes the evolving nature of risk in the modern world presents not only significant commercial opportunities but also an imperative to change.
Speaking at the Fitch Ratings Insurance Roadshow 2019, Evans cited macro areas that he considers as driving factors for many of the developments and challenges in the general insurance and long-term savings market. These include digital revolution and the industry’s relationship with governments and policymakers.
Also among the areas he discussed was our changing society, and how he thinks insurers should respond to keep up with the times. For instance, Evans pointed to ageing, with the number of over-85s projected to double by 2035 and that of over-65s forecast to grow by a fifth come 2030.
“With an older population, more people will be working for longer, so liability and motor policies need to reflect that reality, not unnecessarily penalise it,” said the ABI official in his keynote address.
Evans added that people living longer will want travel insurance products “that do not penalise automatically for age or for illnesses in the distant past,” noting the recent focus on cancer. Meanwhile younger people with fewer fixed assets, he said, will continue to fuel demand for experience-based coverage.
The underwriting behind motor insurance will have to continue to change significantly as well, given the growth of the shared economy and the emergence of autonomous features in both commercial and personal motor vehicles.
Amid the multiple changes, Evans stated that the response as a sector “has to be to embrace the insurance opportunities and changes,” citing what he called “the entrepreneurial spirit that ensured this industry has thrived during previous major changes” such as the development of cars and airplanes decades ago.
