PHILADELPHIA--(BUSINESS WIRE)--Leading insurance and risk management experts from around the world gathered at RIMS 2017 to outline ways risk management efforts can bolster economic development and improve the speed and effectiveness of recovery efforts after natural disasters.
The Insurance Development Forum (IDF), an unprecedented public/private partnership of the United Nations, World Bank and the global insurance industry, sponsored the panel session, “How Risk Management Can Build Economic and Human Resilience,” as part of the new Executive Leadership Track at RIMS 2017. The panelists were Stephen Catlin, Executive Deputy Chairman of XL Catlin and Chair of the IDF; Joaquim Levy, Managing Director and CFO of the World Bank Group; and Bradley Kading, President of the Association of Bermuda Insurers and Reinsurers.
To underscore the potential impact of the IDF’s efforts, Kading noted that a mere 1% increase in insurance against economic losses from catastrophe in a given region can reduce by 22% the burden on taxpayers for the cost of recovering from those losses. The IDF’s goal is to reduce climate and disaster risks worldwide through better informed risk mitigation and to expand the percentage of the world’s economic value that is insured – often as little as 1% in some of the poorest economies.
“One of the challenges of working between the public and private sectors is that we do have different fiscal priorities,” Catlin told the audience. “The issue is can [insurers] get a reasonable return for our shareholders whilst at the same time providing a product which has societal value. My answer to that is in fact yes we can and I think we’ve proven it over time. … I think we are better off going as an industry particularly alongside the World Bank and United Nations” with shared objectives.
The IDF’s initial focus is on building greater resilience to climate and natural hazards risks in line with the G7 InsuResilience target of extending climate risk insurance coverage to an additional 400 million people in vulnerable countries by 2020. “To reach this goal in the next three years, we all need to work together, and the leadership of the insurance industry has been crucial,” Mr. Levy said. “Disasters have an enormous economic cost every year and are one of the main factors that can push people back into poverty. Insuring against them brings significant welfare benefits.”
Central to the IDF’s efforts is working to create a resource of industry knowledge and best practices through its contributions to the Technical Assistance Facility (TAF), which governments and public officials can use to become better informed about the role of insurance and risk mitigation solutions in at-risk countries. The TAF will also help public officials navigate the regulatory challenges and implementation hurdles that often limit the effectiveness of insurance facilities and prevent their use as a safeguard against natural disasters and climate risks.
The IDF will build upon its efforts at RIMS 2017 and bring together more humanitarian and development experts, insurance executives and policy makers during the International Insurance Society’s Global Insurance Forum in London July 17-20, 2017. The meeting will focus on some of the major insights from the IDF’s work and is designed to encourage greater adoption of insurance facilities by governments around the globe.
The Insurance Development Forum (IDF) is an unprecedented public/private partnership between leaders of the United Nations (UN), the World Bank Group, and the insurance industry. Its initial focus is to contribute to closing the protection gap—the gap between insured disaster losses and the actual economic costs of disasters—by optimizing and extending the use of insurance and its related risk management capabilities to build greater resilience for people, communities, businesses and public institutions that are vulnerable to climate change, disasters and related economic shocks.
The IDF is chaired by Stephen Catlin, and co-chaired by Joaquim Levy, World Bank Group Managing Director and Chief Financial Officer, and Helen Clark, Administrator of the United Nations Development Programme. Ms. Clark’s term at the UNDP has expired and the UN is expected to make a replacement appointment shortly. Other Steering Committee members include Mark Carney, Governor of the Bank of England and Chair of the Financial Stability Board, and 13 insurance industry CEOs.