GFIA Annual Report 2023-2024

Opinion: Healthcare gap

Partnering for better health

Insurers should be key partners in delivering better healthcare globally

We have long known that demographic shifts are taking place around the world, with populations ageing and the effects becoming more visible. As people get older, healthcare demands naturally increase, putting added pressure on already stretched systems. While new medical breakthroughs show enormous potential benefits, they also come with significant costs. The COVID-19 crisis has merely accelerated the strains on the system.

Though the challenges may vary across regions, the conclusion is the same: rising healthcare costs and strained government fiscal capacity are pushing systems onto unsustainable paths.

Existing healthcare gaps are large and growing

Even today, there are already unacceptably large gaps in access to healthcare – and these gaps are widening. GFIA recently published a report quantifying the health protection gap. The findings are sobering.

The healthcare gap can be estimated by looking at out-of-pocket (OOP) health expenditure and the estimated costs of medical treatments that are not pursued due to financial constraints. The narrowest analysis (quantifying OOP amounts that individuals deem as onerous) shows a gap of US$800 billion. This definition of the gap is particularly relevant in emerging markets. If we include medical interventions not done due to cost constraints, the gap skyrockets to US$4trn annually.

As significant as these gaps are, they could grow by 4-5% each year, reaching US$6-6.5trn by 2030.

But these numbers only tell part of the story. We cannot forget that, behind all this, there are individuals who are suffering unnecessarily, even potentially dying from inadequate care. We can and must do better.

“As significant as these gaps are, they could grow by 4-5% each year, reaching US$6-6.5trn by 2030.”

Close partnership between government and insurers is needed to close the gap

With strained public finances and most governments already struggling to manage the existing system, it is clear that a combination of public health infrastructure/security and private health offerings (eg, private health insurance) is needed to narrow the protection gap.

While the insurance industry can contribute to reducing these protection gaps when the underlying risks are insurable, a single stakeholder group alone cannot narrow the gaps. Close collaboration between private and public stakeholders is necessary. Governments and other public entities can help build the appropriate regulatory environment, create fiscal incentives, or conduct public awareness and prevention campaigns, among other actions. And insurers can bring their experience in pooling risk and bringing innovation to the market to help drive efficiencies and new solutions for people.

The good news: we know how to do this, and successes are appearing globally

As daunting as this can seem, the good news is that great success stories are starting to appear around the globe and insurers are at the core of many of these innovations. The specific range of levers will be highly specific by country, depending on the position of the insurance industry, past initiatives and policy choices.

GFIA has identified some examples where insurers can play a leading role, including:

Establishing add-on services to help customers take better care of their health
Better use of a full set of distribution channels to increase coverage
Raising awareness and advocating for prevention and early detection
Widening the scope of coverage for public health insurance/social security to reduce untreated conditions
Complement public health insurance/social security with private insurance
Widening base of eligible customers for public and private insurance
Facilitating access to healthcare infrastructure
Increasing effectiveness of healthcare spending

More details on each of these levers can be found in the GFIA report: Global protection gaps and recommendations for bridging them.

Collaborating for better healthcare

The global picture around healthcare is strained. Rapidly ageing populations, coupled with exciting, but expensive, new treatments will inevitably put growing pressures on healthcare systems. The status quo will not be up to the task of providing the healthcare that people expect and want in the coming decades. However, looking for ways that insurers and governments can work more closely together will help and we already know what will work.

Print version

Awareness-raising campaigns

Insurers across Europe are involved in a broad range of awareness-raising campaigns. For instance, in Germany, risk-awareness campaigns are implemented jointly by state authorities, consumer protection organisations, the insurance industry, architects and other stakeholders. Their collaboration is built around a common goal: to raise awareness of the effects of climate change and natural hazards, of the benefits of loss prevention, and of best practices as regards natural catastrophe-resilient buildings. The high level of risk awareness in Germany is one of the reasons for the relatively low protection gap; indeed, the insurance penetration rate for natural perils such as storm or hail is more than 90%.
Most European insurance associations have initiatives to raise risk awareness, such as dedicated workshops, events and educational seminars, as well as frequent in-depth articles, themed newsletters, presentations and other publications.
Many French insurers have launched prevention campaigns and also support the campaigns of “Assurance Prévention”, an association founded by the French insurance association (France Assureurs). Assurance Prévention has produced numerous leaflets, infographics, quizzes, etc. to raise awareness of natural risks. Through its initiatives, it aims to develop a “culture of risk prevention” among students and teachers.

The Greek insurance association (HAIC) launched a digital awareness campaign — “Better to know than to think you know” — to provide consumers with useful information about private insurance and to set the record straight on some misperceptions. The campaign consists of six videos to educate the public about how private insurance works. Most of the videos emphasise the need for resilience in the face of natcat risks and the role of insurers in protecting private property. The videos are hosted on the interactive iknow-insurance.gr platform, which allows visitors to do a short quiz to test their knowledge of private insurance and then obtain additional information.
Insurance Sweden is currently working with its members on a common methodology for calculating carbon dioxide emissions during building repairs. The aim is to raise awareness of the impact on CO2 emissions of rebuilding after fire or water damage, and thus of the importance, from that perspective as well, of preventing such damages.
Insurance Sweden published a statistical report in October 2021 on how different municipalities and regions have been affected by damage caused by flooding, storm and fire.
Spotlighting the central role of municipalities in climate-change adaptation, Insurance Sweden ranks Swedish municipalities according to their adaptation work. The methodology is based on the European Commission’s Adaption Support Tool (2013). The ranking is released every other year, the June 2021 version is available here.
UNESPA, the Spanish insurance association, launched a dedicated website in October 2021 — “Naturalmente Protegidos” (Naturally protected) to explain how natcat insurance works in Spain. It focuses on 10 different risks (rain, flood, wind, drought, frost, hail, snow, earthquake, volcanic eruption and lightning) and details for each how insurance covers property, life, harvests and livestock. The website illustrates the success of the Spanish public-private natcat insurance model. It was jointly developed by private insurers (UNESPA), the Consorcio de Compensación de Seguros (CCS) government scheme and Agroseguro, Spain’s agricultural insurance system, and was launched within the framework of Estamos Seguros, UNESPA’s financial education campaign (running since 2016).
In collaboration with CEPYME, the Spanish confederation of SMEs, UNESPA launched in October 2020 “Prevenir para crecer” (Prevent to grow), a website with information on insurance for SMEs. The website highlights potential risks to which SMEs are exposed, including natcat-related risks, and provides advice on how to prevent them.
Insurance Ireland, the Irish insurance association, and a number of Irish insurers have launched consumer blogs and information repositories on their websites to share useful information with consumers about responsible and ESG investing.

Education

The European insurance industry works to increase financial literacy in relation to risk awareness, insurance protection and long-term savings:

The Croatian Insurance Bureau (HUO) launched a first educational project in 2009, “Financial literacy in the Republic of Croatia”, which was followed by a range of educational activities, often implemented jointly with independent insurers. One of these activities, “Safer Tomorrow”, was initiated in 2021, and aims to raise citizens’ awareness of the benefits of insurance. Within the framework of the project, HUO launched several videos and infographics, some of which specifically target young people.
The HUO organises a yearly competition for the best scientific paper, the best graduate thesis and the best undergraduate thesis in the field of insurance. HUO also publishes the “Croatian magazine for INSURANCE”, a scientific journal for professionals to advance good practice in the sector. Finally, some insurers in Croatia created a colouring book for children to promote financial literacy at a young age in a fun and simple way.
In Italy, the ANIA Academy, together with CeTIF (Research Centre on Technologies, Innovation and Finance of the Università Cattolica del Sacro Cuore), launched the second edition (2022) of the 2nd level master’s in insurance management to train professionals and enable them to respond to the challenges of the “new normal”.
ANIA is also collaborating with LUISS Business School to develop a major course in insurance management as part of its Executive Master in Financial Management.
Insurance Europe produces information for consumers as part of its “InsureWisely” financial education initiative. This includes one-pagers on different insurance topics, including how to limit the effects of natural catastrophes.
The French insurance association (France Assureurs) developed a series of educational booklets within the framework of EDUCFI (the French national strategy for economic, budgetary, and financial education), an initiative launched by the French Central Bank. These booklets help users to better understand how insurance works and what insurance products do and do not cover.
The Spanish insurance association (UNESPA) set up a financial education programme for schools, “El Riesgo y Yo” (“The Risk and I”). It involves 40 insurance undertakings and 164 volunteers and aims to give 2 500 teenage school students basic financial knowledge and insights into risk management.