Former New Zealand prime minister Helen Clark has joined global insurance industry leaders, and the World Bank Group in the formation of the Insurance Development Forum (IDF) in her scope as administrator of the United Nations Development Program.
One of the aims of the forum is to use insurance sector expertise to promote a better understanding of hazards, quantify the risks, and anticipate the potential impacts of natural disaster and climate change.
It hopes to help governments, particularly in developing countries, to improve their resilience frameworks and make informed decisions on insurance, investment and wider policies.
Another aim is to increase insurance coverage, since more than 90% of the economic costs of natural disasters in the developing world are uninsured, according to the IDF.
The IDF also wants to facilitate the availability of climate and natural hazard risk-sharing facilities in most regions.
“These collective actions can help close the protection gap,” the IDF said in a statement.
The announcement of the IDF formation followed an address by UN Secretary General Ban Ki-moon last week which underlined the critical role the insurance industry can play in building natural disaster resilience and helping meet the UN’s Sustainable Development Goals.
The IDF is chaired by Stephen Catlin, who is executive deputy chairman of XL Catlin, deputy chair of the International Insurance Society and chair of the Association of Bermuda Insurers and Reinsurers.
Catlin said his grandchildren were at the forefront of his mind in this role.
“My grandchildren expect me to make responsible decisions that affect their future,” he said.
“Insurers’ risk management skills help us assess natural disaster risk and can be exported to allow governments at all levels to reduce future losses by designing in resilience into infrastructure projects; and in increasing the use of insurance as a pre-disaster economic resource to allow people to protect their families, property and assets.”
He said risk identification, measurement, pooling and diversification were essential features of any insurance program.
“These skills can increase the utilisation of insurance which will reduce the reliance on post-disaster aid and better target resources to the most important and needed humanitarian crises.”
He cited research which had shown that just a 1% increase in insurance penetration could reduce the disaster recovery burden on taxpayers by 22%.
A representative for Helen Clark, Michael O’Neill, highlighted how important it was for public and private partners to come together for the good of the planet.
“We at UNDP believe that the IDF has the potential to put vulnerable economies and societies on a path to a green, risk-informed, and sustainable future. And in the process, to change the way we, in development agencies, and our partners in the private sector do business together,” he said.
The IDF established four priority work streams in its inaugural meeting:
- Understanding Risk
- Risk and Insurance Regulation, Legislation and Policy
- Risk Sharing, Transfer and Response
- Risk and Resilience
The leadership announced the formation of seven working groups targeted to specific project goals which will report to the High Level Steering Group in September in the margins of the UN General Assembly.