White Papers

The Global Protection Gap

The protection gap, or the difference between economic and insured losses, results in an enormous cost to society when disasters do occur. This cost is ultimately borne by both governments and individuals, and continually threatens the resilience and economic well-being of developing nations. Even in the United States, where insurance penetration is typically high, flood and earthquake risk are severely underinsured.

Understanding and measuring the protection gap is one of the biggest challenges facing the insurance industry today. For regions and perils covered by catastrophe models, this protection gap represents not only potential business growth opportunities, but a responsibility to act.

The 2020 edition of AIR’s white paper “Global Modeled Catastrophe Losses” presents global loss metrics based on AIR’s latest suite of models. AIR estimates that on an annual average basis, catastrophes around the world are expected to cost nearly USD 100 billion in insured losses, which represents less than half of the total insurable losses.

Download AIR’s white paper to find out how the losses break down by region and peril, how the size of the protection gap varies throughout the world, and much more.



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