Reinsurance plays a critical but often overlooked role in enabling large-scale infrastructure projects in developing economies, according to a perspective piece published by PartnerRe.
The piece, drawing on insights from Piergiorgio D’Ignazio, global product leader for credit and political risk, follows a mission to Côte d’Ivoire organized by the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC). It outlines how risk-sharing mechanisms help address a persistent financing gap in emerging markets, estimated by global figures at trillions of dollars annually, citing data from the United Nations Conference on Trade and Development.
D’Ignazio said public funding alone is insufficient to meet the scale of development needs in economies such as Côte d’Ivoire, where infrastructure demands span energy, water, transportation, and urban development. Private capital, he noted, often requires additional risk mitigation before committing to large-scale investments.
“Reinsurance acts as a true force multiplier,” D’Ignazio wrote, describing how the mechanism spreads risk across a global network rather than concentrating it locally. He said no single insurer could typically cover a major development project, such as a high-rise commercial tower or a large-scale water treatment facility, on its own.
The Côte d’Ivoire mission included site visits to two projects: the Tour F development, a commercial tower, and the La Mé water treatment facility. D’Ignazio said both projects demonstrated how risk mitigation supports implementation and delivery.
The piece cited World Economic Forum data indicating that a 1% increase in infrastructure spending can generate more than seven million jobs globally, with the effects particularly strong in the water, sanitation, and construction sectors in developing economies.
D’Ignazio also highlighted the resilience benefits of reinsurance coverage, noting that insured infrastructure can recover more quickly from unexpected events because of the financial stability provided by risk transfer.
The article concludes that reinsurance functions as what D’Ignazio called “the invisible scaffolding” behind major infrastructure projects – essential to their success, though rarely visible to the public.
In October, the Insurance Development Forum (IDF) announced the first close of its Infrastructure Resilience Development Fund (IRDF), securing $340 million to finance resilient infrastructure projects across emerging markets and developing economies.
The fund, managed by Global Infrastructure Partners, a part of BlackRock, was developed from a blueprint co-created by IDF members, including AXA, Convex, Generali, SCOR, Swiss Re, and Zurich, and includes a substantial commitment from the International Finance Corporation. The fund targets a diversified portfolio of resilient infrastructure, including clean water and water management, waste management, energy, transportation, hospitals, and digital infrastructure.
