Is the world more resilient?
Ten years after the 2008-09 global financial crisis, the world economy remains ill-prepared for the possibility of a repeat event, in our view.
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The major economies are now less well-equipped to rebound from unexpected shocks than they were before the crisis, given lower trend growth, higher debt burdens, weaker financial market structure and a move to less openness.
To this end, we encourage policy makers to focus on increasing competitiveness on a national level and cooperation at the global level. We propose the following for the purpose of improving global resilience … our "Wish list".
Our "wish-list" for stronger economic resilience
With respect to the contribution of insurance to resilience, large protection gaps across mortality and property lines of business indicate a still-elevated vulnerability to adverse events for many households and businesses globally. This sigma newly estimates a global USD-500-billion combined mortality and protection gap in premium equivalent terms.
By working to further narrow protection gaps, and by being able to expand their market risk absorbing capacity and long-term investment activities, insurers will continue to play a main role in strengthening system resilience. Based on latest figures from different sources, we estimate that the global re/insurance sector has total assets under management of about USD 30 trillion – roughly three times the size of China's economy. The large asset base of the re/insurance industry should be fully mobilized as risk absorber.
Read more in the full report.