ZURICH--(BUSINESS WIRE)--The Geneva Association, the leading international think tank of the insurance industry, has published in collaboration with the Insurance Development Forum (IDF) the paper Guidelines for Risk Assessment to Support Sovereign Risk Financing and Risk Transfer, which provide governments with a framework for conducting the risk assessment underpinning national risk transfer programmes.
Such programmes rely on an accurate understanding of the risk context, including the potential impact of hazards (natural or man-made) on the population, infrastructure and economy. In order to adequately quantify it, governments should partner with multiple stakeholders including the insurance industry, risk modelling experts and data providers. Through public-private partnerships, governments can benefit from the insurance industry’s holistic risk management expertise.
Dr Maryam Golnaraghi, Director of the Extreme Events and Climate Risk research programme of The Geneva Association, said: “There is growing evidence that countries with widespread market-based disaster insurance coverage do recover faster from the financial impacts of extreme events. While the benefits of risk transfer tools such as insurance are increasingly recognised globally, there is still a large and in some places growing protection gap, indicating that the opportunities and benefits of risk transfer mechanisms are not harnessed to their full potential. This guideline, which will be distributed by the UN to national governments, is a step towards addressing such gap.”
Stephen Catlin, IDF Chairman, commented: “Extreme events often have devastating effects, particularly in low-income countries, hindering economic development and poverty reduction efforts. The insurance sector is fully committed to working with governments, civil society and international institutions to build greater resilience and protection for people and communities that are increasingly vulnerable to natural disasters and their associated economic impacts.”
The Guidelines for Risk Assessment to Support Sovereign Risk Financing and Risk Transfer paper has been developed in response to a request from the United Nations Office for Disaster Risk Reduction (UNISDR) and is part of the document Words into Action Guidelines: National Disaster Risk Assessment–Governance System, Methodologies, and Use of Results.
The paper supports the adoption of the Sendai Framework for Disaster Risk Reduction 2015-2030, the 2030 Agenda for Sustainable Development, and the Paris Agreement. These three UN-backed initiatives have promoted the need for a comprehensive approach to managing extreme events and climate change risk, spanning across economic sectors and levels of government.