Mortality protection gap continues to grow to US$58 trillion in Asia-Pacific

The latest Swiss Re Asia-Pacific Mortality Protection Gap report has found that, the mortality protection gap in life insurance has increased by more than US$16 trillion in the last four years, and more than doubled in the last ten.
The mortality protection gap now stands at a staggering US$ 58 trillion, representing the difference between the cover typically required by a family and the resources they have available should a wage-earner pass away suddenly. While the rate of growth has slowed in the past two years, it is still worryingly high and underlines the fragile nature of financial security for many families in the region.

While these figures may be hard to quantify, they have very real consequences for consumers who typically would be expected to need around 10 times their annual salary in life insurance protection. It’s incumbent upon the sector to find new ways or reaching consumers, educating them about the dangers of this lack of protection and developing innovative solutions to narrow this protection gap.

This report also shows that the rate of economic growth has not been matched in growth of life insurance protection. It would be fair to say that while many across the region have enjoyed the benefit of increased economic output, not enough consideration has been given to how to protect that increased wealth.

How can we act together to close the gap?

These figures present both a challenge and opportunity to insurers. In the first instance, it’s imperative that insurers develop products and solutions to provide consumers with multiple access points to life insurance. Secondly, this presents a growth opportunity, as there is clearly an unmet need, given the growth in the protection gap.

While the figures are startling in their own right, we should also be trying to understand more about why this is happening. Is the traditional reliance on family support in the region considered enough? Are insurance products too complex and detailed for consumers to consider? The whole sector needs to look at how these questions can be answered, as it is a significant issue and growth opportunity for the sector.

At Swiss Re, we are committed to close this protection gap with insurers, governments, and regulators:

The Swiss Re Mortality Protection Gap Report is now available. Please kindly fill-in a simple form before downloading this report.

Published 20 July 2015, updated 1 September 2015

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