The post-COVID-19 environment is fertile ground for insurers to find new ways to team with the public sector and help mitigate social inequality, insurance think-tank The Geneva Association says.

Shocks which cause households to lose income hit the poorest the hardest, and a surge in public debt after COVID will further strain social security systems while at the same time expectations from recipients will increase.

The association says private insurance solutions can potentially play a bigger role in complementing public sector schemes.

“Private insurance solutions can potentially play a bigger role going forward,” it says. “This prospect comes not only with commercial opportunities but also underlines the insurance industry’s role in stabilising economic growth, defusing financial crises and stemming social unrest and political violence.”

Capturing this potential is a complex task, with insurers having to balance absorbing additional longevity risk as well as creating entirely new markets – for example, protecting hundreds of millions of informal workers in developing countries.

Geneva Association MD Jad Ariss says the long-term social and economic impacts expected from COVID-19 are “a call to invigorate and recalibrate discussions” to address social inequality.

“The stage is now set for new public-private partnerships that leverage insurance as a critical part of the social safety net,” he said.

Insurers should examine complementary approaches to protection and also promote financial and insurance literacy, especially in low-income countries, while “far-sighted insurers should do more than simply downscale traditional products”.

It recommends innovative responses such as parametric policies and says technology can boost the appeal, affordability and accessibility of insurance products and improve trust.