An interesting perspective here that alternative capital will help to bridge protection gaps.
At a gathering of those excited, invested, or merely interested in new technological developments in Insurance yesterday evening, Country President & CEO of Reinsurance UK&I at Swiss Re Russell Higginbotham highlighted that there have been few changes to Political, Economic, or Social threats in recent years (at least as fundamentally impact on risk protection), but that technology has leaped forward and provides both opportunity and threat.
The reality is that those seeking to disrupt traditional market practices and better engage with Clients needs are most likely to bridge the protection gap. You simply cannot market to people who have grown up with total connectivity in the same way as the previous generation, their expectations and appetites are fundamentally different.
The protection gap, consisting of areas of under-insurance or in some cases no insurance protection at all in both mature and emerging markets, is the biggest opportunity for alternative reinsurance capital, ILS and capital markets to play a role, according to Fermat Capital’s John Seo. Speaking at the 2015 Bermuda Reinsurance conference, hosted by PwC and Standard & Poor’s this week, John Seo Co-Founder and Managing Principal at cat bond and ILS specialist investment manager Fermat Capital Management LLC, discussed the need for more capital to help fill the gap between economic and insured losses