With disaster risks accelerating faster than societies can adapt and protection gaps widening, well-designed public-private insurance programmes (PPIPs) aligned with national resilience strategies can strengthen risk reduction, according to a recent report by the Geneva Association.
The report highlighted that natural and man-made disasters are becoming more frequent, more costly, and harder to absorb. These risks are outpacing societal adaptation, widening protection gaps, and testing the limits of re/insurance markets.
Against this backdrop, policymakers and industry leaders are faced with the question of how societies can maintain affordable, reliable protection as disaster risks intensify.
The Geneva Association outlined the role that PPIPs can play in addressing these protection gaps.
PPIPs share risks and costs across public and private stakeholders—households, businesses, re/insurers, governments, and potentially capital markets—to make insurance more available, more affordable, and to boost uptake in ways that neither the public nor private sector could achieve alone.
The report noted that many PPIPs have succeeded in restoring or increasing coverage where private markets could not. However, too often, they have functioned as passive shock absorbers rather than as part of a broader strategy to reduce risk.
Historically, these schemes were founded reactively, often in the aftermath of major disasters. Persistent protection gaps are now prompting many jurisdictions to explore PPIPs proactively, rather than waiting for a crisis to force action.
The Geneva Association emphasised that maximising protection over time requires a shift from financing disasters to proactively managing risk. Governments must prioritise investment in risk reduction, strengthen private insurance markets, and deploy PPIPs strategically where private capacity is missing.
The analysis revealed that many PPIPs are under severe strain due to rising losses. While sharing risk across individuals, businesses, re/insurers, and governments is essential, it is no longer sufficient for some perils and regions. For PPIPs to be sustainable, they must form part of a comprehensive national risk-reduction strategy rather than replace it.
In its conclusion, the Geneva Association said: “This shift requires a new deal between governments, re/insurers, and society. Governments must lead on risk reduction, invest in resilient infrastructure and enforce risk-informed planning and regulations that incentivise individuals and businesses to mitigate their own risks. Insurers must advance risk analytics and pricing that reflects actual risk while rewarding prevention. PPIPs remain essential tools, but they should be (re)designed as an integral part of this broader strategy – one that complements and incentivises risk reduction rather than subsidising exposure.”
The report emphasised that when well designed and aligned with national resilience strategies, PPIPs can do more than share losses after disasters: they can reinforce incentives to reduce risk, protect public finances, and support faster, fairer recoveries.
Jad Ariss, Managing Director of the Geneva Association, said, “Public-private insurance programmes can’t just be passive shock absorbers that pay out after disaster strikes. To remain viable in a world of escalating risks, they must become resilience engines – reinforcing prevention, strengthening incentives to reduce exposure, and helping societies recover faster with less pressure on public budgets.”
Hélène Schernberg, Director Public Policy & Regulation at the Geneva Association, added, “PPIPs are complex to design and can be costly for governments. Policymakers therefore need a structured decision process: substantiate the protection gap, exhaust risk-reduction measures and enhancements to private insurance markets, define the exposures that warrant intervention, and make an explicit fiscal case for the residual risk the state is willing to absorb.”
