LONDON, Feb. 27--The major insurance industry players Thursday cited the big data application and climate change as the main challenges for the sector's future development during "The Insurance Summit", which was held by the Economist in London.

LOW LEVELS OF DIGITAL MATURITY

Global insurers have acknowledged that actions should be taken to tackle the current low levels of digital maturity, according to EY, an accounting and advisory company.

In its global insurance digital survey report, EY said seventy-nine percent of insurers responded they are "not setting the baseline" for digital or are "still learning."

"The adoption of technology by consumers has rocketed. Our customers will deal with us very differently." said Mark Wilson, CEO of Aviva Plc., in the opening keynote speech of the summit.

Wilson highlighted the age of technological disruption, geographic shifting of wealth, the use of data (big data), demographic and health changes and new regulation requirement as the five main changes in the insurance industry.

By citing the forecasting figures from Intel, he said by 2015, there will be 3 billion people online and eight zettabytes of data amount will created and shared.

"Data is the fuel in the tank of insurance," he said.

Andrew Kendrick, president at ACE European Group, also said:" Data use is exploding in our more global, more connected world - and, frankly, the industry is struggling to get its head around it."

"Research by the Chartered Institute of Insurers found that 82 percent of industry professionals believe that insurers who fail to capture the potential of big data will become uncompetitive. But depressingly, 95 percent say underwriting departments lack the necessary tools to do so," said Kendrick.

According to the annual World Insurance Report 2014, which was released by Capgemini and Efma on Feb. 26, insurers anticipate by 2018, nearly one-fifth, or 19.7 percent, of their business to be generated through internet-connected PCs, up from 12.7 percent in 2013. Another 10.9 percent is expected to come via mobile channels, up from a mere 1.5 percent last year.

CLIMATE CHANGE CAUSING UNCERTAINTY

Beside the digital and technology challenges, the rapid global warming and climate change over the last three decades also weighed heavily on the industry, as it casting uncertainty on insurers' outlook.

Since 1980, global GDP growth rate was pushed down by 1.3 percent per annum due to weather risks, said Clement Booth, Allianz SE's board of management's member, during the summit.

"Weather changes and extreme weather are undeniably caused by climate change," said Booth. But today, only 30 percent of all damages from natural catastrophes are insured.

Booth cited the Haiyan typhoon, which caused dozens of billions of dollars loss to Philippines, as an example, noting that only 10 to 15 percent damage was insured, thus risking reputation for insurers present in the region.

In an article to the Guardian, Trevor Maynard, head of exposure management and reinsurance at Lloyd's of London, said that since 1980, the cost of natural catastrophes has grown by 870 billion U.S. dollars in real terms and 2011 was the second costliest year on record for natural catastrophes including devastating floods in Thailand and Australia.

Booth suggested the whole industry to take concrete steps to examine systematic integration of environmental, social and governance issues to minimize risks.