Life insurance remains the biggest selling in spite of the fact that relatively few people die during a working lifetime – although sales of living covers: income protection, health, and trauma have risen considerably. We expect that trend to continue, as social beliefs about prevalence and impact of the risk of early death change, and the real experience of non-fatal serious illness becomes accepted.
Another big area likely to change is motor vehicle insurance. It is possible that driving could be made a lot safer. What if there were 90% fewer car accidents? How would that affect vehicle insurance markets? Warren Buffett thinks that – although it is a long way in the future – it would logically reduce the need for insurance a lot. Although frequency is only one factor to consider in holding cover. Like life insurance, if there remains on a small frequency of catastrophic risk, then lots of people will still hold cover. It will be interesting to see.