Closing the protection gap
AN ISSUE FOR DEVELOPED AND DEVELOPING MARKETS
Only about 30% of losses from natural catastrophes have been covered by insurance in the past ten years. In middle or low-income countries the uninsured proportion of economic losses often exceeds 90%. This situation is set to get worse. The International Monetary Fund (IMF) has concluded that countries located in the tropics, the vast majority of which have a low GDP, will bear the brunt of more regular weather-related shocks.
The protection gap, which measures the difference between insured and uninsured losses, is an issue all over the world. The protection gap means that individuals, businesses, communities and whole nations are less resilient than they could be if the gap were closed.
Figure 1.1 - Expected insured and uninsured losses from natural catastrophes, 2014, in USD billion 2
-30
-15
Insured
Uninsured
15
30
US Japan China Mexico Italy
Taiwan Turkey Philippines Indonesia Germany Canada
India Chile
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