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Insurance an “essential stabilizing force” amid uncertainty, concludes UN

25th October 2022 - Author: Matt Sheehan

A new report by the United Nations Development Programme (UNDP) has concluded that insurance provides an essential stabilising force in the face of ongoing economic uncertainty for communities around the world, particularly for those living in vulnerable circumstances.

The UNDP’s Human Development Report was authored in partnership with Assicurazioni Generali and The Human Safety Net Foundation, and looks into the challenges of uncertainties that have resulted from recent global crises.

It concludes that prevention, preparation and social insurance against future risks will have an essential role to deal with uncertainty and promote sustainable development, with insurance highlighted as a key pillar in protecting people from unavoidable consequences.

However, the UNDP argues insurers will also have to offer enhanced and extended protection to people, focusing on innovation and the modernisation of services, so that they can deal more effectively with the current context of instability.

The challenge of financial inclusion and the opportunity to access credit and insurance services in order to reduce poverty and inequality was also flagged as essential.

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“The world seems to be moving – ever more quickly – from crisis to crisis, such as the climate and biodiversity crises, inequalities and political polarization, technological upheavals,” commented Ulrika Modéer, UN Assistant Secretary-General and Director of the Bureau of External Relations and Advocacy, of UNDP.

“And this is happening at a speed and scale beyond what we have ever experienced,” Modéer continued. “The Human Development Report argues that to navigate the future we must double down on human development, and focus on empowerment. Therefore, we need to implement policies that focus on investment — from renewable energy to preparedness for pandemics, and insurance—including social protection— to prepare our societies for the ups and downs of an uncertain world. While innovation in its many forms—technological, economic, cultural—can also build capacities to respond to whatever challenges come next.”

Jan Kellett, Team and Corporate Lead for Insurance and Risk Planning, and Daniel Stander, Special Adviser on Sustainable Finance, both working for the UNDP, recently stressed that the Programme’s Insurance & Risk Finance Facility (IRFF) needs more financing to support its growth, while also indicating that a tightening world economy could present some opportunities for its work.

Among the major destabilising forces highlighted by the Human Development Report were the COVID-19 pandemic, the war in Ukraine and climate change, which the authors note have increased inequalities and the political-institutional polarisation of society, reducing the overall level of trust in others and, more generally, in the community.

The findings of the report were presented in Venice at the home of The Human Safety Net, Generali Group’s foundation, and was organised by The Italian Ministry of Foreign Affairs and International Cooperation.

“For the first time in 32 years, the Human Development Index is declining, and Generali is ready to do its part to help reverse this trend, offering innovative services capable of mitigating growing uncertainty,” said Andrea Sironi, Chairman of Assicurazioni Generali. “We will collaborate more and more closely with public and private sector bodies that share the same objectives, and the partnership we signed with UNDP last April goes in this direction”.

Mauro Massoni, Director for Development Cooperation Strategy and Planning, Minister Plenipotentiary at the Italian Ministry of Foreign Affairs and International Cooperation, also commented: “The Covid-19 pandemic and then the war in Ukraine have highlighted fragilities in the international order, exacerbating food and energy insecurity and situations of instability.”

“Investments made by governments to support social protection mechanisms, in the areas of health and pandemic response, capacity building and resilience of institutions, transition to a green economy and food security, are one of the essential tools to effectively overcome inequalities, protect human rights and tackle poverty in a systematic way.”

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