Library: hr | equarium – “We need a broader and more responsible role for insurance as a social and economic moderniser.”

Executive summary:

Put people at the centre of efforts to build back better 

We’ve heard plenty about the ‘new normal’ and the need to ‘build back better’ after Covid-19. What does this mean for insurers and the role of technology?

Covid-19 has been a shock to all societies, industries and sectors. At the same time, because it’s hastened digitalisation and forced us to think carefully about emerging risks, we’re now more aware of social and economic issues and the positive contribution that digitally-enabled insurance can make in our everyday lives.

Customers must come first

The pandemic underlined what we already knew: that the insurance industry must digitalise and become more customer-centric and responsive to social and economic change. Insurers must use technology to strengthen their role as a force for good and increase protection for the communities they serve, especially those who are most at risk.

How can insurance contribute to the ‘social contract’?

We need a broader and more responsible role for insurance as a social and economic moderniser. Even without the impact of Covid-19, insurers have been focusing on ways to create a safer and more inclusive world. And now, as we rebuild and face new challenges, the concept of the social contract – and the contribution of insurance – has never been more important.

What is the social contract?

The social contract is an implicit agreement that people should cooperate to ensure certain levels of protection and collective welfare. The concept was popularised by philosophers such as John Locke and Jean-Jacques Rousseau, and it describes the role of governments and the obligations of citizens. To modernise the social contract, we must recognise that the world is facing new social and economic challenges. Insurance can help to manage risks and fill protection gaps.

Covid-19 highlighted global vulnerabilities and exposed protection gaps that jeopardise livelihoods and health. Insurers must address these weaknesses and build resilience by collaborating with insurtechs. They must promote positive change and safeguard all generations and communities. Digital technology, richer data, and wider industry collaborations will all help to bridge protection gaps and strengthen the social contract.

What are some of the key risks that insurers can mitigate with technology? 

All of the big risks that we must tackle today can be mitigated with digitally-enabled insurance and technology partnerships. Climate change, natural disasters, poverty, healthcare, ageing populations, sustainability, and now pandemics – all have insurance implications.

Insurtech builds bridges to industry verticals such as healthcare, unlocking information from silos and enabling it to flow freely. It creates transparency and insights that can reduce risks and increase protection. Crucially, this includes extending insurance to sections of society that were previously underinsured or excluded from cover.

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