Finance ministers move to boost insurance regimes

Finance ministers move to boost insurance regimes | Insurance Business

Finance ministers move to boost insurance regimes

Asia-Pacific Economic Cooperation (APEC) finance ministers are looking to improve their insurance regimes and disaster risk financing, following the recent string of earthquakes and extreme weather.

They aim to strengthen disaster risk insurance programs to provide an additional layer of financial defence for public assets. They are taking into account ways to raise risk-informed decision making, implementation of insurance schemes and investment in disaster resilience.

The finance ministers, who convened in Port Moresby this past week, focused on improving financial management of public assets in an emergency. The initiative covers public assets ranging from post-disaster assistance to roads, ports and airports to hospitals, office buildings and telecoms.

“The increasing frequency and intensity of natural disasters is adding to economic and financial risks for our economies,” Papua New Guinea’s Deputy Prime Minister and Treasurer Charles Abel, who chaired the APEC finance ministers’ meeting, explained. “The tsunami that hit Sulawesi, reminders of that tragedy during tremors in Bali and Papua New Guinea, and Hurricane Michael in the United States underscore the disaster challenges we face in the region.”

“The joint actions being advanced by APEC finance ministers will boost our capacity to mitigate elevated disaster risk levels,” he noted.

The initiative also includes financial protection strategies incorporating a mix of financial instruments, defined rules for government post-disaster assistance and cost-sharing, and legislative frameworks that allow catastrophe risk insurance of public assets through public-private partnerships.

“Work underway in APEC to narrow gaps in public sector financial risk assessments, which may not capture uncertain, disaster-related liabilities, could further enable aid commitments, infrastructure damage control and continuity in business and trade,” Hang Thu Vu of the World Bank’s Disaster Risk Financing and Insurance Program.