Inclusive Insurance - Responding to change

couple meeting with insurance broker

Steven Graham, Technical Policy Manager in the IFoA’s Policy Team, gives a taster of what to expect in the IFoA’s new Inclusive Insurance Bulletin, Responding to change

Insurance offers valuable protection to individuals and businesses across society, playing an important role in economic development and supporting wider societal needs – at least in theory. However, long before Covid-19, the world was going through what some termed a fourth industrial revolution, and insurance was by no means immune. A more recent dynamic has been the unfolding Covid-19 crisis, which has pushed society further along a technological – and digital – trajectory. Against this backdrop, it is important to consider whether these technological ‘forces’ will lead to greater inclusion, or instead risk further exclusion in insurance. And if the latter, what can be done to tackle such inequalities to insurance access? 

Responding to change, the second bulletin in the IFoA’s Inclusive Insurance series, explores the impact of insurance pricing technology on inclusion, and considers potential practical solutions to help address exclusion, and adverse outcomes for vulnerable consumers in particular. The bulletin includes contributions from Which? magazine, the Access to Insurance Initiative, Insuring Women’s Futures, the ICAEW, and several members of the actuarial profession.

John Taylor, the IFoA’s Immediate Past President, considers the impact of technology on insurance pricing and, in particular, the ‘atomisation of risk’ and its impact on insurance inclusion. This atomisation – or greater subdivision of risk – offers some individuals with lower risk profiles potentially lower premiums. However, not everyone is in control of their risk profile and may find insurance becomes less affordable, or available, leading to greater exclusion. This is particularly concerning where vulnerable consumers are more likely to face exclusion – often they are the ones in greater need of insurance protection. 

Paddy Greene from Which? magazine picks up the insurance pricing theme and considers the erosion of trust in insurance, and the need for greater transparency in the use of data. Recent regulatory efforts to tackle the loyalty penalty in general insurance are also discussed. 

We gain a global perspective, in particular, the role insurance supervisors can play in increasing insurance inclusion, via the Access to Insurance Initiative’s work in the developing world. The role of insurance supervisors in leading by example through regulatory change and international collaboration to learn from successful inclusion strategies is explored. 

Philippa Kelly of the ICAEW focuses on the ethical use of data. Practical solutions, including insurance boards being rooted in the social purpose of their business, explicit assessment of potential barriers to exclusion, and the design and distribution of insurance products from an inclusion perspective, are touched on in her article. It also looks at the importance of broad diversity and its relevance to reducing bias in the use of data – and by extension reducing exclusion.  

Jane Portas (Insuring Women’s Futures) revisits some of the themes mentioned above, but also considers gender differences and takes a broad view of financial wellbeing. These issues are also assessed against the backdrop of the Covid-19 pandemic. 

Finally, we have a contribution from the IFoA’s Alan Marshall, on work the IFoA is doing to support financial inclusion through enhancing the quality of actuarial work.  

All in all, our second bulletin provides a range of both contrasting and complementary views on insurance inclusion. We hope you find it interesting, and would be delighted to receive your feedback.

If you want to contribute your own perspective on inclusion in insurance, please contact