Collectively, the re/insurance industry possesses the necessary data, risk knowledge and expertise needed to enable vital infrastructure investment across the world’s emerging markets, global reinsurer Swiss Re says.
While growing urban populations require substantial investment in infrastructure to enable sustainable growth, there remains a substantial gap, notes Swiss Re.
Today, only about 26% of the roads in Myanmar are paved and just over half of Cambodian households have access to grid-quality electricity.
In Indonesia, traffic congestion resulting from inadequate transportation infrastructure is estimated to account for more than $4 billion in annual losses to the city of Jakarta in the form of fuel wastage, productivity losses and medical costs.
From the pre-construction to operational stage, the global re/insurer believes the use of analytics and technology to accurately assess key risk factors of projects will support investors’ appetite for risk taking and encourage investment.
But Swiss Re believes the role of re/insurance goes beyond enabling risk absorption, and that the public and private sector can work together to strengthen the industry’s role in investing in long-term resilience-building projects.
Gregory Schiffer, Swiss Re’s Global Head Trade & Infrastructure, Property & Specialty Underwriting, says there are opportunities to unlock these assets for investment by promoting standardisation and transparency through a common disclosure framework and related documentation to establish a tradeable infrastructure asset class.
“Establishing a risk-based market environment and framework, and encouraging Environmental, Social and Governance (ESG) benchmarks and disclosures can facilitate investments in infrastructure projects that support a sustainable, low-carbon economy,” explains Schiffer.
“The opportunity is immense for us to make an impact in building a more sustainable and resilient future.”