The Insurance Development Forum (IDF), a partnership consisting of the World Bank Group, the United Nations Development Programme, and global re/insurers, has called for further public-private collaboration to help close the protection gap.
Speaking at the International Insurance Society’s (IIS) Global Insurance Forum in Singapore last week, representatives from the IDF noted that the protection gap currently leaves emerging Asian countries most vulnerable to the impact of natural catastrophes.
According to the Asian Development Bank (ADB), between 2000 and 2018 more than four in five people (84%) affected by natural hazards were living in developing Asia.
The region also accounted for 55% of the global disaster death toll, and for 26% of global damages.
In the period from 1970 to 2019 the region lost US $1.5 trillion due to natural disasters, and the estimated costs of damage from these catastrophes as a percentage of GDP is increasing.
“The insurance industry and the public sector need to accelerate their collaboration into action,” said Denis Duverne, IDF Chairman and Chairman of the Board of AXA.
“We need to drive concrete significant measures to extend the use of insurance and related risk reduction capabilities to help build greater resilience to climate risk and natural catastrophes in countries where it is needed most.”
Achim Steiner, Administrator of the United Nations Development Programme (UNDP), also commented: “The consequence of unmanaged risk is clear. In 2018, there was USD 160 billion of loss from natural hazard, USD 80 billion of which was not insured. The impact of this loss on lives and livelihoods is immense, especially in the most vulnerable countries and communities.”
“The insurance industry has a critical role to play in helping to close this ‘protection gap’ and UNDP looks forward to working with them on innovative partnerships to achieve this,” Steiner added, “especially through global partnerships such as the Insurance Development Forum and InsuResilience Global Partnership, to which we remain firmly committed.”
IDF also focused on infrastructure and the importance of proactive risk management in developing Asia and the Pacific, which is projected to have infrastructure needs of $1.7 trillion per year to 2030 in order to maintain the region’s growth momentum while also addressing climate change mitigation and adaptation.
Duverne continued: “The insurance industry has vast technical expertise on how to increase climate resilience for infrastructure assets, and risk transfer mechanisms are a critical source of funding for repairing or reconstructing infrastructure when it is damaged or destroyed by a natural disaster. “
“To protect economic gains, enabling greater access to these capabilities should be at the forefront of the policy agenda for the region,” he concluded.
