Insured Against Everything But This

Series · Part 1 of 2

The world has become riskier and less protected at the same time. That should be the best news the protection industry has had in a generation. It is not, because the people who price everybody else's risk have never priced their own, and that unpriced risk now decides how much of the market they can reach.

Two letters

Two letters landed in Singapore households this year.

Same household, same year. Income became less certain while protection became more expensive and thinner, in the same postbox, within weeks of each other.

If you work in insurance, you wrote the second letter. The first is exactly why the second lands the way it does. The rest of this piece is about why that happens, and why it does not have to.

01This is a turmoil you can underwrite

Whenever the world wobbles, our industry talks about "macro uncertainty" as though it were weather: something that happens to the business, rather than something that arrives on the books with a claims code attached. Here are five things the last two years of turmoil turned into. Each is an underserved need, and the list is far from complete.

Every line is turmoil, and every line is also an underserved line of business.

This is what gets missed when the industry reads the news as background noise: the turmoil is the demand. Fear of losing your income is income protection. Fear of the bill is health cover. Fear that your cover no longer keeps up is indexation, top-ups, and a conversation somebody should be having with you. So the numbers should be going our way. They are not.

02The umbrella shrinks when it rains

Every line of protection tells the same story, and it is not the story you would expect after years of rising anxiety.

Each line is measured differently. Different measures, one direction.

Need went up and coverage went down, because of a mechanism. When money is tight, protection is the first thing a household trims, since it is the only purchase where nothing visibly bad happens when you stop paying. When claims cost more, insurers raise prices and tighten terms, prudently, and the result is less cover for the same money. Employers facing double-digit medical inflation raise co-payments and narrow networks. And when work turns informal, group cover does not follow the worker out of the building.

Each of those responses is rational on its own. Together they produce something absurd: the umbrella gets smaller exactly when it starts raining.

Every risk in that table is well understood and competently priced. Which leaves one obvious question: if the need is this large and this well documented, why doesn't the industry sell these people something smaller, more bespoke and better suited to them?

03What the customer is actually asking for

Strip out the industry vocabulary and every household in that gap is asking three plain questions. None of them is about risk transfer.

Those three failures look unrelated. Behind them sit two capabilities that together draw the boundary of an insurer's market: affordability, the lowest premium at which a policy can be written and still make money, and customisability, how far a product can be reshaped for the life in front of it. Built the right way, the two need not trade off against each other. Affordability comes first, because it decides who is even in the room.

04The floor: affordability

Below a certain premium, a policy is not worth making. The risk is fine; the arithmetic is not. Quoting, underwriting, issuing, servicing, collecting, chasing, renewing and eventually paying a policy costs much the same whether the premium is S$900 or S$9. The risk scales with the sum insured. The work does not.

So every insurer operates with a floor, whether or not it has written the number down: a minimum viable premium, below which a policy costs more to run than it will ever earn. In unit-economics terms the floor is the cost to serve, and it settles affordability long before any actuary touches the rate.

Schematic, not to scale. The gap begins where the economics stop, long before the need does. Lower the floor and the households between the two dashed lines become an addressable market, with nothing about the underlying risk having changed.

Who lives on the wrong side of that line? Some households cannot pay. Far more could, but do not need the package on the shelf: the platform worker whose cover should track an irregular income, the contractor who needs six months of cover rather than a whole-life commitment, the household that trimmed its cover and would take back a smaller slice, the small business that buys nothing because nothing is sized for it. None of them is uninsurable. They are uneconomic to serve at the size and shape they need, which is a different problem and a far more fixable one.

This is also why awareness campaigns rarely close a protection gap on their own. In Swiss Re's survey, price was among the leading barriers to buying cover, ahead of any lack of interest.⁶

The floor is not built from money alone

The height of the floor comes from three layers, and only the first looks like money.

So the height of the floor, and with it the size of the protection gap, says very little about customers. It is a product of those three layers: how the business is structured, what its systems allow, and how long its people take to decide. Lower any one and the floor drops; lower all three and it drops a long way. That buys flexibility in what a product can cost: cover that adjusts monthly, cover that attaches to a gig rather than a job, cover that costs S$9 and still makes money. The risk stays the same. The addressable market grows.

05The mould: customisability

The floor decides who an insurer can afford to serve. The mould decides what it can offer them, and it is cast by the same three layers.

A product that takes eighteen months to develop, ships in one shape and is repriced once a year works like a mould. So does everything around it: the underwriting rules, servicing path, claims workflow, partner integration and reporting are each hard-wired to the product they were built for, so reshaping the product means reshaping the operation by hand. Every customer who does not fit the mould is either turned away or sold something that does not fit, and the second is more common, and more corrosive, than the first.

The industry standardised for a good reason. For most of its history affordability and customisability pulled against each other: every variant was a build, every build had a cost, and one shape for everyone was the only way to keep the floor low. That trade-off came from how the engine was built. An engine built as one piece has to be rebuilt to make a different shape. An engine built as modules (cover, rules, price, eligibility, channel, servicing path, claims path) makes a new shape by assembly, and the hundredth shape costs about what the first one did. Other industries call this mass customisation, a term coined in the late 1980s, and it was always a design achievement more than a spending one.¹⁴ It is within reach for insurance now, because a policy is rules all the way down. What such an engine looks like is the subject of Part 2.

Most consumer businesses now build and price dynamically: watch, learn, change the offer, watch again. Insurance holds some of the richest behavioural data of any industry and uses little of it to shape what it sells. Four levers would change that.

Singapore has already run part of this experiment and published the result. In 2025, online direct channels produced 10.0% of all new life policies sold, and 1.2% of weighted new business premium.¹³ The figure says two things. Customers will buy protection unassisted, at scale, when it is simple and quick: one new policy in ten is now bought that way. And what they buy is small, because small and simple is all the online shelf carries. Nobody yet knows whether those buyers would take a larger or better-shaped policy, because none has been offered. The ratio describes the shelf more than the customer, and very probably points to a much larger market.

All four levers need the same capability: seeing what is happening, deciding, and changing the product quickly, which is exactly what the three layers of the floor prevent. None of it means pricing free of oversight. A configurable product still files, still passes a fairness test and still reserves against its tail. What changes is the cost and time of each variant, while the rules it must meet stay the same.

06Everyone else moved both levers

The usual consolation is that every incumbent industry is slow. The record says otherwise. Every business that sells to the public has the same fixed-cost problem: someone must take the order, handle the money, service the account and sort it out when something goes wrong, and that costs roughly the same whether the transaction is large or small. Each had a floor and sold a standard package. One by one they lowered the floor and broke the mould, and each could say what one unit of its own work cost.

Four industries moved both levers. All four can tell you what one unit of their own work costs. Insurance tracks a share of premium.

Telecoms is the closest analogue, because both levers moved at once. Prepaid lowered the floor: a customer who could not commit to a contract could buy ten dollars of airtime and be a subscriber that afternoon. Flexible plans broke the mould: data, minutes and add-ons assembled by the customer and priced to usage. Cost per subscriber fell while the number of people who could be a subscriber rose, and the operators that did it were incumbents running billing systems as old as any policy administration system. The analogy holds for the operating model rather than the risk model (an operator carries no tail risk, an insurer must), but the floor and the mould were never about the tail.

Insurance measures itself differently. An expense ratio falls when premiums rise, so it can improve in a year when the work got worse, and it includes commissions and acquisition costs alongside the cost of running the policy.¹⁰ It tells you how heavy the business is, but not whether the next policy is worth writing. A weighing scale is being used as a ruler. Bain's 2026 global insurance report makes the same point from the other side: direct written premiums doubled over the past decade while expense ratios fell by only one percentage point.¹¹

I went looking for the other number: a published cost to serve one policy for one year, tracked over time, the way retail tracks cost per order. I could not find one for any market. That absence is the finding.

And this is the good half of the cycle

Source: Swiss Re Institute, sigma, July 2026.¹²

That peak was built on rate increases, a mild catastrophe year and investment income on higher yields: the pricing cycle and the bond market, more than the operating model. Swiss Re forecasts total real premium growth of 1.3% for 2026, down from 3.9% in 2025.¹² The tailwind is fading, and nothing underneath has changed.

The industry knows. In KPMG's survey of more than 250 insurance leaders, three-quarters expected to cut costs by at least 10% by 2030, yet only a quarter described their transformation initiatives as highly successful.¹⁵

Meanwhile the customer, who has been shopping in all four of those other industries, has learned to keep score in days.

Nobody formed that expectation by comparing insurers with each other. Which leaves one question that nobody in the building can answer.

We price the whole world to three decimal places. The three numbers that decide who we can protect (what our own work costs, the market we cannot reach, the price of waiting) we have never priced at all.

Insured against everything but this.

What Part 2 answers

The obvious conclusion is that this is an engineering problem: the engine was built as one piece, so someone should rebuild it in modules. The industry has drawn that conclusion before. It is what every core-replacement programme of the last twenty years set out to do, and a good number of them are still running.

I have spent my career inside large institutions across several industries, and the programmes that stalled rarely stalled on the engineering. They stalled in the room where the decision was taken: five capable people, each with an excellent reason, none of them wrong. Part 2 is about those five, and about the one engine all five could say yes to, modular without a rebuild because it sits beside what is already there. It closes with a single page that puts these three risks in front of all five at once. Fair warning: one of the five is you.