The typical health and life insurance model of exclusions must be overhauled to cover more conditions and people, particularly those in vulnerable situations, and make prevention a core aim, according to insurers TD and Vitality.
At the launch of the UN Environment Programme’s Principles for Sustainable Insurance (PSI) report, the need to take insurance away from exclusion-based coverage was raised as a key issue for the global sector to tackle.
TD Insurance associate vice president, government and industry relations Moira Gill highlighted the importance of innovation within the sector.
“As insurers, one of the things we have to do is look at the existing insurance model, the products where we have exclusions and we have conditions,” she said.
“Thinking about the work we’ve been doing at the UN, in Canada and at TD, I really feel we have to change that.
“Instead of looking at who and how and what we exclude, we need to look at how we can include more coverages, more conditions.
“How we can expand our distribution systems to reach more markets, not just those who are well covered, but also those who are having more impacts, especially on that nexus of climate change.”
Collaboration and co-operation
To enact this overhaul, Gill warned the insurance industry may have seemed arrogant in its traditional approach and recommended consultation and cooperation with the people most in need of help to find alternative solutions.
“Our normal approach of being in an ivory tower and looking at numbers and deciding how to approach markets is not going to work to address this issue,” she said.
“If we design products and distribution without talking to the populations we are trying to help, we may actually create worse outcomes than what we currently have.
“There is perhaps an arrogance in our traditional approach.
“It is important to talk to the people whose issues you are trying to address and understand from their perspective – what it is they need and what they want us to do to help – and not try to solve problems for people without bringing them fully into the equation as partners,“ she added.
UNEP Principles for Sustainable Insurance Initiative programme lead Butch Bacani agreed that as it stands now the most economically and environmentally vulnerable people will be left behind.
“The people in small island developing states, Africa and the Middle East, will be left behind if we don’t turn the corner, both on healthier environment and being more inclusive in our approach,” he said.
Move beyond typical products
Vitality chief sustainability officer Deepak Jobanputra agreed, arguing that insurers ”really need to look at ourselves hard”.
“We have to really step up here and not just rely on the traditional insurance models that we have used for years and years and years.”
Insurers should move beyond the types of products, services and benefits they typically provide and past the focus of financial resilience, Jobanputra said.
That meant “extending the claim-based model towards a risk prevention model”.
“That’s really changing our role – changing our identity,“ he added.
On the issue of sustainability, Jobanputra said: “We need to think about social outcomes. It is so critical to think about all of our stakeholders and really focus on health.“
He noted that health became the primary concern for everybody during the pandemic with many people changing their lifestyles as a consequence.
“Prevention needs to be a core feature of what we deliver, we have a real moral responsibility as leaders in this industry to actually drive this change,” he said.
And he added that insurers should be engaging customers on a weekly or monthly basis to help them improve their health.
Topics that could be covered in those conversations include the importance of physical activity, nutrition and diet while promoting the reduction of smoking and alcohol consumption.
“We need to ladder-up and focus on those four key behaviors” Jobanputra concluded.