Insurance Cost Challenges

𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝘄𝗶𝗹𝗹 𝗯𝗲 𝘁𝗵𝗲 𝗳𝗶𝗿𝘀𝘁 𝘀𝘆𝘀𝘁𝗲𝗺 𝘁𝗼 𝗰𝗿𝗮𝗰𝗸 𝘂𝗻𝗱𝗲𝗿 𝗰𝗹𝗶𝗺𝗮𝘁𝗲 𝗿𝗶𝘀𝗸 — 𝗮𝗻𝗱 𝗶𝘁 𝘀𝗵𝗼𝘂𝗹𝗱 𝗰𝗼𝗻𝗰𝗲𝗿𝗻 𝘂𝘀 𝗮𝗹𝗹. Natural disasters caused $𝟯𝟲𝟴 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 in global economic losses last year, according to Aon — the ninth year in a row losses topped $300 billion. Only 𝟰𝟬% of those losses were insured. The protection gap is widening. As insurers retreat from high-risk regions, public safety nets — often overstretched — are stepping in. More households, businesses, and governments are being left to absorb risks they cannot afford. This isn’t just about insurance anymore. When insurance breaks down, so does credit. When credit dries up, property values fall, costs rise, and resilience weakens — just when it’s needed most. @Günther Thallinger 𝗳𝗿𝗼𝗺 𝗔𝗹𝗹𝗶𝗮𝗻𝘇 put it starkly: “𝘛𝘩𝘦𝘳𝘦 𝘪𝘴 𝘯𝘰 𝘤𝘢𝘱𝘪𝘵𝘢𝘭𝘪𝘴𝘮 𝘸𝘪𝘵𝘩𝘰𝘶𝘵 𝘧𝘶𝘯𝘤𝘵𝘪𝘰𝘯𝘪𝘯𝘨 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘴𝘦𝘳𝘷𝘪𝘤𝘦𝘴. 𝘈𝘯𝘥 𝘵𝘩𝘦𝘳𝘦 𝘢𝘳𝘦 𝘯𝘰 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘴𝘦𝘳𝘷𝘪𝘤𝘦𝘴 𝘸𝘪𝘵𝘩𝘰𝘶𝘵 𝘵𝘩𝘦 𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘵𝘰 𝘱𝘳𝘪𝘤𝘦 𝘢𝘯𝘥 𝘮𝘢𝘯𝘢𝘨𝘦 𝘤𝘭𝘪𝘮𝘢𝘵𝘦 𝘳𝘪𝘴𝘬.” The Institute and Faculty of Actuaries (IFoA) project a 𝟱𝟬% 𝗰𝗼𝗹𝗹𝗮𝗽𝘀𝗲 𝗶𝗻 𝗴𝗹𝗼𝗯𝗮𝗹 𝗚𝗗𝗣 𝘄𝗶𝘁𝗵𝗶𝗻 𝗱𝗲𝗰𝗮𝗱𝗲𝘀 if climate risk is not properly managed. Climate risk is no longer a future scenario. It is here. It is compounding. And it is reshaping our economy in real time. There are positive signs: ➤ Hannover Re and Swiss Re are restricting fossil fuel underwriting. ➤ Parametric insurance models are speeding up disaster recovery. ➤ EIOPA and the European Central Bank are pushing for public-private risk sharing. These are encouraging — but early signs. 𝗠𝘆 𝘁𝗮𝗸𝗲: Climate risk is already disrupting the systems we rely on: insurance, credit, asset valuation, and public finances. Systems change is needed. The insurance sector holds a unique vantage point — but leadership now demands rethinking long-held assumptions about risk, resilience, and responsibility. The sector has an opportunity to lead: ➤ Embed forward-looking climate risk into underwriting ➤ Signal future exposures more transparently ➤ Drive transition finance to accelerate decarbonisation ➤ Redirect investment into adaptation ➤ Co-design shared risk pools and resilience bonds Collaboration between insurers, financiers, and governments is no longer optional — it is the foundation for economic stability in a climate-disrupted world. The sooner we align risk pricing with physical reality, the stronger our chances of building a more resilient economy for the future. #climaterisk #insurance #resilience #finance #sustainability #systemicrisk #adaptation –––––––––– For updates on sustainability, climate, and innovation, follow me on LinkedIn: @Scott Kelly

IndiaStack is easily one of the most ambitious, futuristic public digital infrastructures the world has seen. Aadhaar covers 1.3B+ people. DigiLocker has 440M users. UPI clocks 10B+ monthly transactions. e-KYC, eSign, Account Aggregator, Health IDs; we’ve built an infra stack that’s interoperable, open, and population-scale. But here’s the catch: while the infra is world-class, the products built on top of it are still catching up. This is the classic infra-product gap. We nailed the backend, but the user-facing value layer, the one that solves for specific use cases across India, is still thin. There are some early productisation wins like neobanks using e-KYC + UPI, credit startups building on Account Aggregator, health platforms experimenting with DigiLocker-stored records. But we’re yet to see mass-scale commercial success across other sectors like micro-insurance, rural credit, or telemedicine. The major reason of this is that the barriers aren’t technological anymore. They’re structural. There’s a deep design-for-Tier 2/3 challenge. Low literacy, limited digital access, and lack of trust still define user behaviour in Tier II/III and rural India. Meanwhile, IndiaStack-based products often get stuck navigating fragmented regulatory layers. A product using health records via DigiLocker needs to clear vastly different policy filters than a fintech app using e-KYC. Add to that: monetisation is hard. Infra like UPI and Aadhaar is low-cost or free. Building for segments with low ARPU, limited data, and high CAC often means relying on burn or subsidy models. Most startups don’t have that kind of runway. And even when the infra is there, cross-sector interoperability is patchy. APIs exist, but plug-and-play isn’t plug-and-play in practice. Health data isn’t easily usable in insurance. Financial data isn’t always trusted by lenders. Building a cross-sector product often feels like duct-taping multiple silos. We also haven’t built a wide enough bench of product leaders who know how to design for this unique stack + audience combo. Many early attempts simply digitised old flows. Few reimagined them. This is why we don’t have digital-native micro-insurance that runs on UPI. Or a Tier 2/3-focused HR-tech solution that uses Aadhaar + DigiLocker + Account Aggregator to offer portable benefits. Or a health platform that can use digital health IDs and eSign to coordinate rural care. We have the rails. But we’re still waiting for the right trains, the right playbooks, the right incentives. Productisation isn’t just the next chapter of IndiaStack. It’s the main event. And if we don’t bridge the gap soon, the infra might just become infra: incredible, but underused. #india #indiastack

🔥 Climate Change is Turning Insurance Into a Crisis—What Does This Mean for the Future? Imagine a world where owning a home in certain regions becomes nearly impossible—not because of the property value, but because no one will insure it. The The New York Times recently published a powerful article, "How the Climate Crisis Became an Insurance Crisis". It highlights how increasingly severe natural disasters—wildfires, hurricanes, floods—are forcing insurers to rethink their business models. 👉 Insurers are raising premiums, reducing coverage, or even exiting high-risk regions entirely. 👉 For homeowners and businesses, this creates a dire financial dilemma: live without insurance or move entirely. 👉 The ripple effects on communities and economies are massive, as the article outlines. But this is just the beginning. 📉 💡 Here’s My Take: The insurance industry isn’t just grappling with losses; it’s facing an existential challenge. 1️⃣ Risk Models Under Siege: Traditional approaches to assessing risk are breaking down as climate disasters defy predictability. Innovation is no longer optional—it’s a survival strategy. 2️⃣ A Growing Equity Gap: As insurance costs rise, vulnerable populations are disproportionately impacted. This crisis could widen economic divides, leaving some areas completely unprotected. 3️⃣ A New Mandate for Collaboration: Insurers, governments, and private enterprises must co-create solutions—whether through subsidies, resilience investments, or bold new public-private partnerships. 🌀 The Big Picture This crisis isn’t just about insurance—it’s about rethinking how industries adapt to a rapidly changing world. Will insurers lead the charge toward resilience, or will they retreat? 💬 What Do You Think? How can the industry innovate to stay ahead of these challenges? Are there examples of successful partnerships or strategies you’ve seen in action? #ClimateCrisis #InsuranceInnovation #RiskManagement #SustainabilityLeadership Full article here: https://lnkd.in/ei_2TBZX

Reading about this man’s plight today made me reflect on the struggles faced by countless policyholders who endure unjust claim rejections or delays or short settlement. The current claims process requires an aggrieved policyholder to first write to the GRO (Grievance Redressal Officer) and wait for a response. Only after receiving a rejection or no response can they escalate the matter to the Insurance Ombudsman. Filing a complaint with the Ombudsman involves submitting all necessary documents, followed by a lengthy wait to get a hearing date—especially in locations with a high volume of complaints such as Delhi, Mumbai, Pune, and Ahmedabad. In some cases, vacancies at certain Ombudsman offices further exacerbate delays. Policyholders, who purchase insurance to secure their financial future, often find themselves waiting for months to receive their rightful claims. Meanwhile, many are forced to take loans and bear the burden of EMIs to cover hospital bills. Although efforts are being made by the DFS and other bodies to simplify the process, the waiting time remains a challenge for many policyholders. It's a sobering reminder of the systemic changes still needed to ensure timely justice for all. #policyholder #getyourclaim #grievance #Insurance #DFS #ombudsman https://lnkd.in/gU4FquHB

𝗥𝗶𝘀𝗶𝗻𝗴 𝗖𝗼𝗺𝗽𝗹𝗲𝘅𝗶𝘁𝘆 𝗶𝗻 𝗣&𝗖 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲—𝗪𝗵𝗮𝘁’𝘀 𝗡𝗲𝘅𝘁 𝗳𝗼𝗿 𝗜𝗻𝘀𝘂𝗿𝗲𝗿𝘀? Property & Casualty insurers are facing an unprecedented mix of economic pressure, regulatory scrutiny, and climate-related risks. The industry is rethinking risk models, underwriting strategies, and profitability levers. This new KPMG US report highlights five key challenges reshaping P&C insurance and what insurers must do to navigate rising complexity and drive long-term resilience. 🔹 Economic volatility → Inflation and rising claims costs continue to squeeze margins. 🔹 Regulatory pressure → Increased oversight and evolving compliance requirements demand agility. 🔹 Climate-driven risks → Extreme weather events are making traditional risk models obsolete. 🔹 AI & data analytics → Insurers must move beyond experimentation and fully integrate AI-driven underwriting. 🔹 Evolving customer expectations → Personalized products and digital-first experiences are no longer optional. P&C insurers must adapt or risk falling behind. The challenge is clear: how can insurers drive profitability while managing rising complexity? 📌 Read the full report: https://lnkd.in/eqBzMgrw. #KPMGInsurance #PropertyCasualty #RiskManagement #InsurTech #AIinInsurance

INSURANCE HAS HIT A BRICK WALL The insurance industry, a cornerstone of our financial system, has hit a wall. For decades, it relied on a simple idea: the past could predict the future. But it has now been thrown into a world of massive uncertainty, where the climate is no longer steady, and yesterday’s models are no longer enough. This isn't a temporary crisis; it's the beginning of planetary insolvency, a situation where rising costs of climate-related damages consistently surpass our global ability to cover them. The fundamental principles of insurance—diversification and historical data—are being undermined by the increasing burden of interconnected, systemic risks that develop faster than a slowly adapting industry can respond. We see the first cracks in the foundation as homeowners' insurance becomes unavailable in states across the US. But the contagion is spreading. Soon, we will realize that much of the corporate world owns infrastructure that is becoming uninsurable. This isn't just an insurance problem; it's a systemic threat. Banks depend on insurance. Trillions of dollars in private credit are backed by physical assets—collateral that is now dangerously mispriced because its climate risk has been ignored. As David Howden, CEO of the Howden Group, warned, “the iceberg is looming.” Insurability is no longer just about protection; it is about access to capital. The only way forward is a fundamental shift. The industry must move from solely transferring risk after a disaster to actively reducing it before it happens. This involves embracing adaptation. We see pioneers already doing this—from Iberostar Hotels restoring mangroves to protect its properties, to renewable energy companies redesigning solar panels to endure severe hail. They understand that resilience is now the key. But to make these adaptation decisions effectively, we must let go of the old mindset. Radical uncertainty calls for a new approach—one that moves from Newton’s predictable world to a quantum realm of probabilities. We need to adopt stochastic thinking and new tools that can model a non-stationary future. The ability to quantify this risk, assess the cost-benefit of adaptation, and guide vital investments is no longer just theoretical; it is now visible and accessible. It demands fresh strategic thinking from leadership at all levels, along with a commitment to see the world as it truly is, not as it once was. Leaders who embrace this new reality will not only navigate the crisis but also shape the resilient economy of the future. So, where can we find modelling that is truly stochastic and captures the complete probabilistic nature of our climate future? What does it look like? How can we experiment with it? How does it complement the CAT models we are familiar with? Try RiskThinking.ai’s ClimateEarthDigitalTwin™, the only true stochastic climate modelling platform available. #climaterisk #insurance #adaptation #stochastic

In a bold move, PhonePe has launched a micro insurance plan offering ₹1 lakh coverage for vector-borne and air-borne diseases like dengue, malaria, and typhoid all for just ₹59 per year. On the surface, this seems like a remarkable leap toward accessible healthcare for millions, especially in Tier 2 and Tier 3 cities where quality care is often a privilege. But is this enough to address the deeper issues plaguing India’s healthcare system? Affordability of this plan is undeniably its strongest selling point. At ₹59, it’s less than the cost of a cup of coffee in urban India, making it accessible to low income households. However, the challenges of implementation and adoption are significant. Many potential beneficiaries still lack awareness about the importance of health insurance, or even trust in digital platforms. Moreover, while ₹1 lakh in coverage is helpful, it barely scratches the surface when facing serious medical emergencies or prolonged treatments. Another hurdle is the digital divide. While the plan’s app based purchase and claim process streamlines insurance access, it assumes users are digitally literate . This excludes a large section of rural India, where healthcare needs are most pressing. Additionally, the plan’s narrow focus on specific diseases, while necessary to keep costs low, leaves out broader health concerns that families face, such as chronic illnesses . So, how do we move forward? First, awareness campaigns must be intensified, not just to promote the product but to educate communities on why insurance is essential. Collaborations with grassroots organizations, local governments, and healthcare workers could help penetrate rural markets and build trust. Second, the scope of such micro insurance plans needs gradual expansion to cover more illnesses and offer greater financial protection. Lastly, policymakers and private players need to view this as a stepping stone, not the destination, in India’s journey to universal health coverage. PhonePe’s initiative is a start, a small but significant step in making insurance accessible. Road ahead demands sustained effort, innovation, and partnerships. True transformation will come when we address not just affordability, but the systemic inequities that keep millions from accessing quality healthcare. Refer attached article for insights ⬇️ #HealthcareChallenges #InsuranceForAll #MicroInsurance #AffordableHealthcare #InclusiveGrowth #InsureTech #LinkedIn

No. of farmer families with insurance has jumped from 26% to a huge 86% in 5 years! 🌾 With over 58% of the Indian workforce (that’s as many as ~600 million people) engaged in agriculture, ensuring that our farmers can thrive is more essential now than ever. Yet, many face daunting challenges - from unpredictable weather to rising costs - that can threaten their very existence. So, when I read the recent report from NABARD (National Bank for Agriculture and Rural Development), I felt hopeful. More and more farmers are understanding the importance of insurance, and protecting what’s their own. Insurance applications under the PM Fasal Bima Yojana (PMFBY), a crop insurance scheme, too have surged from 5.3 crore in 2018 to an astounding 14.2 crore in 2023! These aren’t just numbers; they represent families who can now face the future with a little more confidence. And this matters because farming is often like a gamble with nature. Imagine a farmer pouring every rupee they have into seeds, fertilisers, and equipment, only to watch it all wash away in a storm. Without insurance, many end up drowning in debt, taking high-interest loans, or even selling their possessions just to recover. But challenges definitely remain. Delays in insurance claims, disputes over yield data, and a lack of local support mean farmers sometimes wait months - if not years - for relief. In the meantime, their livelihoods are in jeopardy. So what can we collectively do? 🔺 As an insurance sector, we need to spend some more time designing affordable microinsurance products that cater to small farmers with lower incomes. Leveraging technology to streamline claims and gather real-time data can help make payouts faster and fairer. 🔺 The government has a role to play too, running awareness campaigns to inform farmers about the benefits of insurance and simplifying the application process. Local offices with knowledgeable agents who can guide farmers through these systems would be great too. Together, I do feel we can bridge the gap and make sure insurance actually delivers on its promises. Let’s stand together to ensure that every farmer in India can cultivate not just their fields but also their dreams. :) Your views on this? 👇 #agriculture #insurance #farmers #PMFBY #ruralindia #sustainablefarming

My underwriter friend shared his growing frustration with the shifting dynamics of his role caused due to Increasing pressure to meet number targets rather than focusing on thorough risk assessment. Regardless of the risk quality, premiums often fail to align with the exposure, which is deeply concerning. Client’s current obsession on L1 over valuing insurers’ expertise in risk advisory and mitigation is alarming. If this trend persists, the insurance sector risks significant instability. As an insurer, we all are troubled by the rising frequency of AOG losses. Events once considered rare now occur every few months in unexpected regions like Kolkata and Punjab, with recent floods serving as stark examples. This unpredictability challenges insurers’ ability to underwrite risks effectively. Moreover, financial pressures are driving clients away from prudent risk management, resulting in substantial non-AOG losses that strain the balance sheets of insurers and reinsurers alike. Compounding the issue, the market is aggressively offering steep FLEXA discounts and now even slashing STFI and EQ rates, further undermining sound underwriting practices. This race to the bottom prioritizes short-term gains over long-term sustainability, putting the industry at risk of systemic failures. #Insurance #RiskManagement #ClimateImpact #Underwriting

A Letter to my Farmers (415) Rethinking Agricultural Insurance: Smallholder Farmers and their Realities must be a Priority The business of agriculture has taken a different dimension in the 21st century. A typical smallholder farmer now operates within a highly volatile environment, constantly battling unpredictable weather, market fluctuations, unavailability of quality inputs, scarcity of labour and unforeseen pests and diseases. For the majority of these farmers, a single bad harvest could mean the loss of either their entire investment or annual income, which could plunge their families into poverty. While agricultural insurance provides its benefits as a risk management tool, widespread adoption and effectiveness amongst farmers remain very low. Thus, there is a need for urgent solutions to salvage the sector. Recently, the gap between the potential of agricultural insurance and its actual impact on farmers has become increasingly evident. Many existing products are designed with commercial farms in mind, leading to premiums that are unaffordable, complex claim processes and coverage terms not aligned with the diverse crops and the farming practices. Thus, when insurance fails to reflect these realities, it remains an abstract concept rather than a practical safety net. Therefore, there is an urgent need to rethink how agricultural insurance is offered and delivered to serve the farmers, but what changes are required to bridge this divide? The answer lies in a redesign of insurance processes to meet the needs and realities of farmers. This begins with simplifying products: moving away from complex indemnity-based insurance to more easily understood models like index-based insurance, where payouts are triggered by observable weather events rather than individual farm assessments. This reduces administrative costs and speeds up claims. Governments and development partners must explore subsidy schemes for premiums, making insurance products cheaper. Innovative distribution channels are also crucial, leveraging mobile technology for registration, premium payments, and claim notifications, which can overcome geographical barriers. Moreover, tailoring products to local contexts, recognizing diverse crop cycles and varying risk profiles.This might involve offering micro-insurance products that cover specific risks relevant to a particular region or crop, rather than one-size-fits-all solutions. In conclusion, these strategies will go a long way to build the resilience of the farmers and stabilize the rural economies. Therefore, we need to transform insurance from a complex burden into an accessible and effective tool for risk management. And this starts from the collaborative efforts of various stakeholders to co-create these solutions. Let us remember that our commitment to empowering smallholder farmers today defines our tomorrow. Yours-in-Service Babatunde #AgriInsurance #RiskManagement #FoodSecurity #Resilience