Kathmandu. The number of people going abroad for studies, medical treatment or work is increasing. But if someone meets with an accident or suddenly falls ill abroad, who will bear the medical expenses? Will the insurance taken for the family at home still be valid?
These questions are more important now than ever. Insurance needs are changing with the movement of people. Many people now want effective policies not only at home but also abroad.
This change is not limited to the customer’s needs. The entire insurance industry is also changing its business model. There was a time when a country’s insurance companies mainly served customers within that country. Many companies are now doing business in many countries and managing risk globally.
This is due to the effects of globalization. With people, capital, technology, and businesses moving more freely than ever before, the insurance industry is no longer confined to national borders. This shift has been accelerated by a free-market economy, trade liberalization, and the proliferation of digital technologies. The impact of this is clearly visible in the global insurance sector.
The total premium income of the global insurance industry is expected to exceed US$7.8 trillion in 2024. Of this, about 43 percent came from life insurance and 57 percent from non-life and health insurance sector. In other words, insurance is now one of the largest financial sectors in the world. According to industry analysts, a significant part of this growth in the coming years will come from Asia’s insurance sector.
However, this change is not limited to business expansion. Customer expectations have also changed. They now demand faster claim payments, policy management on their mobile phones, overseas coverage, and convenient digital services.
To meet this demand, insurance companies are increasingly using technologies such as artificial intelligence (AI), blockchain, data analysis, and automated claims processing. This not only speeds up service delivery but also makes it easier to detect fraud.
However, this change in globalization is also bringing new competition. To compete with international organizations, local companies will have to make significant investments in technology, information security, and skilled manpower. In addition, compliance with different regulatory frameworks and laws in different countries is increasing operating costs. This pressure is especially acute for small and medium-sized insurance companies.
As a result, the nature of risk is also changing. While fires, road accidents or natural disasters were previously primary concerns, they are now linked to cross-border risks such as cyberattacks, climate change, pandemics and disruptions to global supply chains. As a result, the demand for new products such as cyber insurance, climate-risk insurance, parametric insurance, and digital health insurance is rapidly growing.
Globalization has created new possibilities, new customers, and new business opportunities for the insurance industry. It also brings new competition and new kinds of risks. As a result, the battle of the future will not just be about which organization is the biggest; Rather, it will be about who can adapt to change quickly. That will determine the future success.
A few years ago, insurance was just a paper contract. It is now gradually becoming an essential part of the global digital security system. The question of this reality of globalization is not whether insurance is needed now; Rather, the question is how quickly the insurance industry can adapt to meet new future risks. Rajkiran Das/Insurance News BD
