Between Public and Private – Insurance Solutions for a Changing Society

Two major developments are under way in Europe which are already having an impact on the insurance sector and look set to influence it even more profoundly over the next few years. In many Member States, the debate about the need to rethink the scope of the “Welfare State” is intensifying. An ageing population combined with low birth rates, rising healthcare costs and lack of employment, are making it difficult for public schemes to continue financing social security benefits as known so far. The key question is to know what should still be covered by the State and what could – or should – be left up to the market. The second development concerns the concept of new emerging risks. Floods, hurricanes, terrorism, pollution, food crises etc. While all these risks vary enormously, they have something in common: They raise the issue of who should pay for the damage? Europe´s society and its risk environment are therefore undergoing fundamental changes, and there is a growing interest for society to encourage private insurers to intervene in areas traditionally operated by the public sector. To make sure there is no gap between expectations and market realities, public authorities, insurers and all interested parties need to enter dialogue and understand the very nature of each sector.

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