IDF applauds steps to tackle under-insurance in developing economies
The Insurance Development Forum (IDF), a partnership of the World Bank Group, the United Nations Development Programme, and global insurers, has welcomed announcements by the development ministries of the UK and Germany to dedicate support to narrow the disaster protection gap for communities in the poorest countries.
Speaking at the IDF Session at the International Insurance Society Global Forum in London, Stephen Catlin, chair of the IDF, said: “This is a big step toward activating our common mission as a critical public-private partnership empowered to take on the enormous problem of under-insurance in at-risk developing economies.”
He added that the lack of an insurance safety net in much of the world “is a global problem no one organization, company or individual can solve alone”.
Building on Prime Minister Theresa May’s announcement at the recent G20 summit, Lord Bates, Minister of State at the UK Department for International Development, outlined plans for the UK partnership with the World Bank Group and Germany for creating a Global Partnership for Climate and Disaster Risk Finance and Insurance Solutions.
The UK and the World Bank Group are setting up a Centre for Global Disaster Protection in London, which will support the poorest countries to strengthen their disaster planning and get finances in place before disaster strikes so they can better manage the economic impact of emergencies and build their resilience.
The UK is providing £30 million for the Centre for Global Disaster Protection, which will draw on UK and international expertise to provide neutral advice, innovation and cutting edge science to help build cheaper, faster and reliable finance in emergencies that delivers the most benefit for the poorest people and ensures losses are not borne by people, business and government, which can slow growth and trap people in grinding poverty.
As part of the Centre for Global Disaster Protection, the World Bank Group will establish staff presence in London to support the Centre and benefit from closer connectivity to insurance and reinsurance market institutions. Germany will contribute €20 million as a first step to a linked World Bank Multi-Donor Trust Fund for country specific technical assistance and smart support with the aim to assist vulnerable countries to tailor disaster risk financing mechanisms.
Joaquim Levy, the World Bank Group’s managing director and CFO and co-chair of the IDF, added, “With climate posing an ever-greater risk, we can use insurance and risk financing solutions to strengthen developing countries’ financial resilience to a wide range of threats. By using well-designed financial instruments, we can ease the impact of disasters on the most vulnerable societies, reducing the cost and damage to development progress.”
These announcements by DFID and BMZ will contribute to the creation of a Global Partnership for Climate and Disaster Risk Finance and Insurance Solutions. This was welcomed by G20 leaders at the Hamburg Summit this month. The IDF welcomes DFID, BMZ, and the World Bank Group joining forces to contribute first elements to such a Global Partnership and want to engage many more countries and stakeholders.
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