The United Nations Development Programme (UNDP) has said that its Insurance & Risk Finance Facility (IRFF) needs more financing that will be used to support its growth.
The remarks were made by Jan Kellett, team and corporate lead for insurance and risk planning, and Daniel Stander, special adviser on sustainable finance, both working for the UNDP. They indicated that a tightening world economy poses some opportunities.
Kellett said: “The growing mismatch between the world as it really is and conventional ways of understanding and doing things creates an opportunity to do something new. Where we go from here is up to us.”
Stander, meanwhile, pointed to policies that focused on investment, insurance, and innovation that he said will help people to ‘thrive in the face of uncertainty’.
He added: “Investment to ease planetary pressures. Insurance to provide contingencies in a volatile world. Innovation — scientific, technological, economic, cultural — to respond to the unknown challenges that humanity will face.”
He went on: “It is very hard for people to feel empowered and ready to navigate a future when they are worried about what might happen to their lives – whether losing a job, falling sick or having to deal with a flood, for example. Insurance can offer a psychological and financial safety net that helps people face uncertainty with confidence.”
The two men work for the UNDP, which entered a multi-year partnership with Generali in April this year.
Together, Generali and the UNDP will provide financial and technical resources to design digitally enabled parametric insurance solutions to protect the most vulnerable; develop large-scale risk finance solutions with a focus on cost-effectiveness; and promote thought leadership on both human development and social innovation.
Under the agreement, Generali committed technical and financial resources to the UNDP’s IRFF.
The IRFF is a flagship initiative of UNDP to help finance the delivery of the Sustainable Development Goals. Launched about a year ago by Queen Maxima of the Netherlands and UNDP Administrator Achim Steiner, the IRFF builds on Germany’s Vision 2025 to provide protection against disaster and climate shocks to 500m individuals by 2025.
Kellett remarked: “At the core of the IRFF is the belief that insurance can build resilience to climate, socio-economic and health shocks. If correctly imbedded into the sustainable development context, insurance provides a safety net, and provides the foundation for entrepreneurism and growth.”
Stander added: “Given the scale of the challenge, we need both the capital markets and traditional re/insurance providers to lean in. We need public-private partnerships to craft solutions that are responsive to sustainable development contexts. And we need reinsurance and ILS capital to scale solutions that securitise resilience.”
