Insurance
Insurance plays a critical role in supporting economic activity by protecting individuals, households and businesses against risk. The OECD supports governments to leverage the role of insurance in achieving economic, social and environmental objectives by monitoring insurance markets and developing guidelines and best practices.
Key messages
Climate change, new technologies and globalisation are creating new challenges. The OECD's work on insurance addresses these challenges to support countries in developing strategies for managing and insuring against evolving catastrophe risks.
The OECD produces analysis and statistics on insurance in OECD and non-OECD countries to help governments and the industry understand the evolution of insurance markets and formulate policies. The OECD also engages with industry and other stakeholders to understand the latest trends and risks affecting the insurance sector.
The effective financial management of disaster risks is a key public policy challenge for governments around the world. This is particularly true for those faced with significant exposures to such risks and/or those that have limited capacity to manage the financial impacts of natural and/or man-made hazards, such as floods, earthquakes, cyclones, terrorist attacks, industrial and technological accidents, and pandemics. Finding solutions to address climate-related risks and risks linked to cyber-attacks are high on the policy agenda.
The OECD provides guidance on the development of strategies for the financial management of disaster risks.
Technology and digitalisation provide important opportunities to expand the contribution of insurance to financial protection and risk management.
The OECD is examining the potential benefits of technology application in insurance and providing guidance on creating an environment that supports technology adoption while addressing potential risks to consumers.
A sound policy and regulatory framework is essential for the stability of insurance markets and for the protection of policyholders. Through its work, the OECD seeks to identify effective policy and regulatory approaches to the issues and challenges facing insurance markets and to identify the elements necessary for an effective and efficient policy and regulatory framework for insurance markets. It also promotes industry good practices and governance in the insurance sector.
Context
The profitability of insurers improved in 2024
Overall, insurers were profitable in 2024. Profitability reflected a combination of both underwriting and investment performance; in most jurisdictions, these two components were positive and reinforced each other, contributing to strong overall results. In a few countries, they moved in opposite directions, offsetting each other’s impact.
Public-private insurance programmes are increasingly used to address low insurance coverage of growing flood risks
Increasing flood hazard, continued development in areas exposed to flooding, and low levels of insurance coverage for flood risks in many countries have led to an increase in uninsured losses from floods. Between 2000 and 2024, only 32% of economic losses due to floods in OECD members were insured. An increasing number of countries have, or are establishing or expanding, public-private insurance programmes to support the availability of affordable insurance coverage for flood risks. These programmes have led to broader flood insurance coverage and have contributed to reducing overall public sector exposure to flood risk and enhancing risk reduction and adaptation.
Technology and insurance
Technology, including artificial intelligence, is changing the field of insurance. Listen to experts explain how, and the impact technology is having on regulation.
Related policy issues
-
Well-functioning pensions and insurance systems are vital for stable economies and individual financial security. In the face of challenges like population ageing and climate disasters, reforms are necessary to maintain the robustness and soundness of pensions and insurance systems. The OECD offers crucial guidance on system design, regulation, supervision, risk management, and retirement planning.Learn more
-
Climate change intensifies natural hazards such as floods, droughts, wildfires and cyclones, while modern technologies and urbanisation introduce (or exacerbate) risks like cyber-attacks and disease outbreaks. Managing these risks is a complex public policy challenge. The OECD helps countries develop strategies for managing the financial impacts of catastrophes through guidance, analysis, and best practice sharing.Learn more
-
Innovation and new technologies are having a transformative impact on the insurance sector. While an increasing use of technology can expand coverage to previously underserved segments of society, and emerging markets may stand to benefit from innovations, there is a need for robust regulatory frameworks to protect policyholders' rights and ensure fair treatment.Learn more
-
Well-functioning financial markets are fundamental to long-term sustainable economic growth and financial stability. They provide a platform to raise and allocate capital efficiently, manage risks, determine asset prices and inform investor decisions. Well regulated financial markets foster investor confidence through transparency, fairness, and clearly defined rules of engagement. The OECD’s work on financial markets aims to promote efficient market-orientated financial systems through sound policies for capital markets, sustainable finance, digital finance, public debt management, financial literacy and consumer protection, pensions, and insurance.Learn more
-
Capital markets are crucial for the economy as they allow businesses to access capital and help households to manage their savings. They also support financial stability by providing market-based financing to complement the use of bank credit by the corporate sector. Capital markets' ability to provide long-term financing, particularly equity capital, is also key to enable and support the digital and green transitions.Learn more
Social media
Join the discussion & find us at: