(4.01) Insurers' Business Model

Estimates currently put the total insurance and reinsurance industry losses from Faxai in the region of $3 billion to $7 billion.
Catastrophe modeling firms and reinsurance sources expect typhoon Faxai to cause $3 billion to $5 billion worth in insured losses in Japan.
Insurers have warned that climate change could make cover for ordinary people unaffordable after the world's largest reinsurance firm blamed global warming for $24bn (£18bn) of losses in the Californian wildfires.
FEMA has transferred $4.322 billion of its flood risk to the capital markets through reinsurance in 2017, 2018, and 2019.
Typhoon Lekima's insurance and reinsurance industry impact in China is expected to exceed US $855 million (CNY6 billion).
Reinsurance firm Swiss Re recently said that the global market for personal cyber insurance could grow to be worth more than $3 billion by 2025.
PricewaterhouseCoopers estimates that the introduction of blockchain technology in reinsurance could remove 15-25 % of expenses, delivering an industry-wide savings of $5 billion-$10 billion.
Automation will cause an 8% decline in the numbers of US bank tellers between 2014 and 2024 and the number of insurance underwriters will drop by 11%.
Recent catastrophe losses are expected to result in losses of $136 billion for the re / insurance industry.
The drop in individual premiums as a result of driverless cars will begin in 2026 and could be as much as a $25 billion loss for insurers by 2035.
In non-life reinsurance, global premium growth is expected to be 2.7 percent in 2017 and 2.9 percent in 2018, based on increasing cessions from emerging markets.
Deteriorating conditions in the global reinsurance market and fickle alternative capital sources could push up insurers' capital costs.
The extra layers of bureaucracy can deter technological development and ultimately will lead the insurance industry in Brazil to be a follower of the developed markets.
The Reinsurance Association of America released a report claiming more private sector involvement in the flood insurance market could save billions in taxpayer dollars.
Major tax reforms under consideration in the US could potentially disrupt the way the reinsurance market is structured.
Insurance pools will become more commonplace in the future as insurers seek new ways to ensure as much of the world's assets are able to access insurance as possible.
Blockchain type technology and Smart contracts can be used to initially manage post-trade lifecycle events for Primary Risk and the source for Reinsurance including payments, amendments, novations and claims.
The global market for drones will replace up to $127 billion worth of business services and human labour over the next four years.
Insurers are using their extensive experience of manned aircraft to assess the risks associated with drones and are providing insurance coverage based on size.
When telematics and connectivity become standard features for vehicles, traditional insurance companies will be challenged by the innovative PAYD services offered by insurance brokers.
Everyone from telecom operators to insurance brokers will be affected by the telematics revolution and need to continuously adapt their business strategies to maintain a competitive edge.
Smart home data can provide important insights into the cause of loss and will aid insurance claims investigations.

See full forecast

Last updated: 22 October 2019