The 18th Hydra Insurance and Reinsurance Meeting, hosted by the Hellenic Association of Insurance Companies, took place from September 21 to 23 2016 on the historic Greek island of Hydra. Attracting insurers and reinsurers from 24 countries around the world, the meeting addressed specific concerns and issues that directly affect the industry.
On the first day of the meeting, the panel and participants discussed how technological evolution has affected motor insurance and reflected on likely changes for the industry in the near future. Speakers highlighted the impact that technological advancements such as advance driver assistance systems and forward collision warning have had on motor insurance – both positive (eg, car sharing, vehicle-to-vehicle and vehicle-to-everything communication, improved public transport) and negative (eg, increased driver distraction, more expensive parts). They also predicted the potential repercussions for the motor insurance industry if and when the transition from manual to assisted driving eventually takes place (eg, lost income, reduced investments, staff reductions, potential cost problems, massive changes in distribution). The speakers concluded that technological evolution is continually changing the status quo for motor insurance, and suggested that insurers and reinsurers may soon have to reconsider and redefine their roles and possibly shift towards other products, as emphasis should be given to the vehicle as a product (eg, product liability/recall, professional indemnity, cyber cover) in order to sustain total motor premiums. (Interestingly, this discussion took place on an island where cars have never been allowed and everything is still transported by donkeys and mules).
The speakers went on to discuss how technology is redefining health insurance. Cutting-edge medical technology has significantly increased the cost of healthcare, as new technology-assisted procedures (eg, robotic surgery) gradually become standard practice. This increased cost is borne by insurers. The reduced duration of the average hospital stay as a result of these new technologies has not offset this increase in costs; while additional factors, such as chronic diseases and ageing populations, will further increase costs for insurers, which will inevitably drive up premiums. Traditional methods have proved insufficient to contain costs in the long term; but fortunately, technology also provides tools (eg, telemedicine, connected diagnostic devices) that can help insurers to become "proactive health allies instead of reactive claims settlers". Otherwise, the panellists concluded that in the near future, health insurers will be selling a product that everyone needs, but very few will be able to afford.
The second day of the meeting focused on natural catastrophe insurance. Based on studies in several European countries, the speakers stressed that insured losses against natural disasters correspond to a very small percentage of overall economic losses, which means that the vast majority of the population is unprotected against financial losses from catastrophic risks. In Greece, which is a highly seismic country, this figure is also unreasonably low. In the shadow of the recent earthquake that hit Italy earlier this year, speakers reminded participants that although the strongest, most damaging earthquake to hit Europe occurred in Greece in 1999, Greece remains the only country located within a high-risk seismic zone that is still unable to provide even a rudimentary system to protect residents from the (financial) losses of such a disaster. Speakers and participants concluded that the Greek government should urgently take action, in cooperation with insurers and reinsurers, to introduce an earthquake insurance scheme (eg, the model followed by Spain, Romania and Turkey (premium pool) or by France (losses pool)) that would provide for the immediate compensation of affected citizens should such a catastrophic event occur.
For further information on this topic please contact Athanassios Lambrou at Zemberis, Markezinis, Lambrou & Associates by telephone (+30 210 363 6016) or email ([email protected]). The Zemberis, Markezinis, Lambrou & Associates website can be accessed at www.zmlaw.gr.