Ms Susan Neely
President & Chief Executive Officer - American Council of Life Insurers

Susan Neely is Past President of the Global Federation of Insurance Associations (GFIA), a non-profit association established to represent national and regional insurance associations that serve the general interests of life, health, general insurance and reinsurance companies and to make representations to national governments, international regulators and others on their behalf.

She is also Past President and CEO emeritus of the American Council of Life Insurers (ACLI) where she led an industry whose mission is to help families live better lives by achieving financial security and certainty. Neely drove public policy and advocacy on behalf of ACLI’s member companies before Congress, the administration, in all state capitals, and in the international arena.

Shaping the Future of Global (Re)Insurance:

Key Developments and Emerging Trends

The global insurance sector is currently navigating a landscape marked by significant developments and emerging trends that are reshaping its future. The Global Federation of Insurance Associations (GFIA) provides critical insights into these changes, emphasising the importance of adaptability and innovation in addressing the evolving needs of consumers and the challenges posed by global risks and protections gaps.

Through its 42 member associations and 1 observer association, GFIA represents the interests of insurers and reinsurers in 68 countries. These companies account for around 89% of total insurance premiums worldwide. GFIA brings perspectives from around the globe to reflect on how the industry will take up current and future challenges to both individuals and businesses, while advocating to policymakers to ensure they are involved in finding solutions.

Overview of key developments

Close collaboration with member associations around the world informs GFIA’s global view on the most urgent developments and challenges facing the insurance industry. With a rapidly shifting environment – both literally, in terms of climate change, and figuratively, with societal changes – insurers remain at the centre of an evolving world, having to address challenges across economies, health systems, infrastructure and a digitalised landscape.

Insurance protection gaps

One of the most pressing issues is the growing insurance protection gap, particularly in the areas of natcat, cyber, pensions and health. GFIA published a major report in 2023 underscoring the necessity for insurers and public authorities to work together on closing these gaps, thereby providing better coverage for individuals and businesses facing increasing risks from climate change and economic instability. ¹GFIA report, ‘Global protection gaps and recommendations for bridging them’ (2023), available on the GFIA website.The report contains recommendations to policymakers on the actions that can have the largest potential impact on global protection gaps.

Regulatory landscape

The regulatory environment for the insurance sector is becoming increasingly complex. GFIA has been actively engaging with global regulatory bodies to advocate for a balanced approach that encourages competitiveness and innovation while ensuring consumer protection. In its latest report, GFIA also emphasised the need for adequate regulations that consider the key features of the insurance business model that make it a unique sector. Failing to recognise this by applying regulations from the banking sector threatens to undermine the effective functioning of the insurance sector and its important contributions to society. It would result in additional, unjustified operational and cost burdens that would ultimately be paid for by consumers. For regulatory and supervisory purposes, insurers should therefore be recognised as a separate and distinct sector.²GFIA report, ‘Insurance: a unique sector’ (2024), available here.

The growing importance of financial inclusion and diver­sity, equity and inclusion (DEI)

Financial inclusion and DEI concerns are increasingly crucial in the insurance sector. Insurers recognise the need for inclusive products to provide for underserved and marginalised communities, thereby addressing the protection gaps exacerbated by economic disparities, limited financial literacy and by other issues such as disruptions caused by the COVID-19 pandemic.

Prioritising financial inclusion and DEI is essential from a moral perspective. Strategically, it is also necessary for insurers aiming to future-proof their business. Embracing these principles will help the industry enhance its relevance, expand its customer base, and contribute to more equitable and resilient societies.

GFIA and its members are committed to encouraging and promoting DEI across the sector and published principles in 2023 to support these efforts.³‘GFIA Principles on Diversity, Equity and Inclusion’ (2023), available here. While recognising that financial inclusion and access to insurance have been a priority for numerous international organisations, the development of policy on DEI will necessitate broad consideration and consensus at both national and international levels.

Climate risks

Insurers around the world play an active role in protecting policyholders against the effects of climate change and in advising governments on adaptation and mitigation measures.

Any discussions aimed at addressing climate change must recognise that regulation is not the only – nor often the most appropriate – response, as governments and public authorities need to play a crucial role in enhancing resilience and adaptation measures.

GFIA believes that policymakers should ensure that any new regulatory and prudential proposals related to climate risk are proportionate and do not overlap with existing measures that already meet climate risk policy objectives. For GFIA, insurers need to address regulatory pressures but also align with consumer expectations for responsible business practices. In this context, GFIA developed a set of recommendations to help tackle climate change and the natcat protection gap.

Cyber risks

As the digital transformation accelerates, cyber risk has emerged as a critical area for insurers. GFIA has noted a significant uptick in demand for cyber insurance products, driven by the rise in cyberattacks and data breaches. Insurers are adapting their underwriting practices to include comprehensive assessments of cybersecurity measures, ensuring that policyholders are adequately protected against these evolving threats.

Emerging trends in the insurance sector

Dynamic and evolving trends in the insurance sector are shaping the future of the industry. Rooted in technological advancement, both insurers and consumers are fundamentally shifting the way insurance is viewed and delivered. As technology transforms processes and expectations, GFIA has observed the industry responding with innovative solutions to meet the evolving needs of the market.

Technological advancements

Technological innovation continues to drive transformation within the insurance industry. The adoption of artificial intelligence (AI), machine learning, and big data analytics is enhancing risk assessment and underwriting processes. Insurers are leveraging these technologies to improve customer experiences through personalised products and efficient claims processing.

Changing consumer expectations

Today’s consumers are more informed and demanding than ever. They expect transparency, flexibility and personalised services from their insurers, along with easier and instant access to products, increasingly facilitated by new technologies. Insurers will need to adapt to these changing consumer behaviours by offering tailored products that meet specific needs, including microinsurance. When looking at this issue, it remains important to consider that insurers must use differentiating – particularly in risk-based underwriting – which enables them to provide customised insurance solutions that better meet the needs of each individual customer, including those from diverse backgrounds. Insurance pricing, where not prohibited by local regulation, requires actuaries to apply risk-based differentiation while avoiding unfair discrimination.

Tackling future challenges in the insurance sector

The global insurance sector is at a critical juncture characterised by rapid change and evolving consumer needs. From addressing protection gaps to embracing technological advancements and climate initiatives, insurers must remain responsive in their strategies.

Despite challenges such as inflationary pressures and geopolitical uncertainties, the global insurance sector has shown resilience. That being said, GFIA underscores the importance of collaboration among the industry and policymakers to navigate future challenges effectively. Insurers can enhance their value propositions while contributing positively to global financial stability by leveraging innovation, focusing on consumer-centric solutions and developing public-private partnerships.

The ability to adapt rapidly will be paramount for insurers aiming to thrive in this dynamic environment, positioning them to effectively meet the diverse needs of consumers and strengthen resilience against future risks.