The Insurance Development Forum (IDF) and the Vulnerable Twenty (V20) Group of Ministers of Finance have called for joint collaboration and international support to strengthen global physical climate risk management capabilities.
Together, the IDF and V20 also announced their intention to advance on the creation of the Global Risk Modelling Alliance by COP26 in Glasgow and called on the G7 and the G20 to support this effort.
In particular, Special Envoy Mr. Abul Kalam Azad, of the CVF and V20 Presidency of the People’s Republic of Bangladesh, underscored the necessity to develop risk analytics based on country demand and built on “an inclusive process, commensurate with ground truths”.
And acknowledging the V20’s earlier call for a global public-private partnership for risk analytics and resilience, AXA and IDF Chairman Denis Duverne highlighted the IDF’s call for donor country support to make climate risk analytics a public good, by forming a Global Risk Modelling Alliance (GRMA).
He stated: “The effects of the climate crisis can only be addressed fairly if all sectors pool their resources and risk management expertise at global and local levels. We are honoured by the prospect of partnering with V20 members in bringing private sector capabilities to this important programme and call on G7 and G20 governments to join us.”
Aimed at providing vulnerable country governments with an open-access risk modelling platform, the GRMA is designed to enable V20 members to strengthen their physical climate risk management capabilities and attract investment in adaptation and risk financing solutions.
Special Envoy Azad also highlighted that, in order to complement the work of the GRMA, “the international community must help climate vulnerable countries to close the existing financial protection gap through climate smart insurance subsidies and capitalization support”.
In most V20 economies more than 98% of losses remain uninsured, and investments in quantifying, prioritizing and pricing climate risk are mainly concentrated in the Global North.
Similarly, financial protection tools, such as disaster risk insurance, are least available and affordable in the Global South, largely due to a lack of access to the risk data necessary to build national disaster risk markets and support governments in making critical climate investment decisions.