The UK government and the Insurance Development Forum (IDF) have agreed to create an Insurance Partnership for Development, to help emerging and developing economies prepare financially for disasters and other shocks.
The partnership, between the IDF and the Foreign, Commonwealth & Development Office (FCDO), was announced at the COP31 climate summit in Türkiye. It will launch formally in 2027.
The partnership will focus on three linked areas. The first is scaling pre-arranged finance, so countries have money in place before disasters strike rather than relying on slow, debt-financed responses afterwards. The second is using insurance to reduce the risk of investing in emerging and developing economies and to attract more private capital. The third is deepening domestic insurance markets, so lower-income countries can close their protection gaps and connect with global markets.
The FCDO and IDF will co-lead the work, bringing together insurers, reinsurers, governments, regulators and international financial institutions to tackle barriers no single organisation can solve alone.
“The scale of the [climate] problem cannot be met by the public sector alone,” said Rachel Kyte, the UK’s special representative for climate.
Michel Liès, chairman of Zurich Insurance and chair of the IDF steering committee, noted that the UK government, through its former Department for International Development, helped establish the IDF. Patrick Tiernan, chief executive of Lloyd’s and a steering committee member, said the partnership was an opportunity to build resilience while developing sustainable commercial insurance markets.
The agreement adds to a run of activity on closing protection gaps in developing economies. The IDF recently appointed Hope Murera, chief executive of African reinsurer ZEP-RE, as deputy chair of its steering committee. The Chartered Insurance Institute signed an agreement with Rwanda’s insurers last month to build professional standards, as Rwanda pursues a target of raising insurance penetration from 1.9% to 5% of GDP by 2035.
Moody’s has also highlighted insurance’s role in climate finance. It said last month that insurance and guarantees made up 14% of the concessional instruments used in climate blended finance deals between 2022 and 2024, but warned that credit enhancement cannot make unviable projects investable.
For London market insurers and reinsurers, the partnership could open new opportunities in sovereign disaster risk cover, parametric products and political risk insurance for infrastructure investment, areas where Lloyd’s and specialty markets already play a role.
For brokers working with development finance institutions, sovereign clients or businesses investing in emerging markets, it signals more public support for insurance-backed structures. The details, including funding, governance and the programme of work, will be set out during the first phase ahead of the 2027 launch.
