Insurance may serve only the rich by 2040

The  Economist Impact and SAS study identified four scenarios for the industry's future.

By 2040, the insurance industry could either leverage technology to improve climate resilience and offer personalised solutions or become accessible only to the wealthiest few, according to a new study by Economist Impact and SAS. 

The report, Revealing the Paths to 2040: Four Possible Scenarios for Insurance, outlines potential futures shaped by global cooperation and technological progress.

The study identifies four scenarios for the industry's future:  

Isolationism and unregulated growth: A lack of global cooperation leads to missed climate targets, widening insurance protection gaps as insurers withdraw from high-risk markets.  

Customer-centric transformation: Successful global cooperation fosters technology that enables insurers to focus on prevention, offering personalised, data-driven solutions.  

Selective climate resilience: Advanced economies implement sustainability policies and climate risk strategies, whilst lower-income regions focus on survival, creating uneven resilience.  

Industry collapse: Insufficient collaboration and innovation leave insurers unable to adapt to escalating risks, pushing many out of high-risk markets and increasing reliance on local risk pools.  

Edwin Saliba, senior analyst at Economist Impact, noted that the scenarios aim to help insurers prepare for uncertainties and capitalize on opportunities. 

Franklin Manchester, principal global insurance advisor at SAS, warned that the industry risks failing its core purpose if it continues to price out customers in high-risk areas due to climate change.