The MiN and IDF working together to close the protection gap

Tuesday, July 16, 2019

The increasing importance of insurance for sustainable development was underlined at the recent IIS Global Insurance Forum (GIF) in Singapore, where an entire day - hosted by the Insurance Development Forum (IDF) - was devoted to the role that insurance and related risk management capabilities must play in building a more climate-resilient world. Focuses of the day were Disaster Risk Financing, climate change as a threat to international development, early action in preparation for natural catastrophes, and the importance of consistent, comprehensive, open-access data sources. 

The MiN was represented by Vice-Chair of the Board Andrea Keenan of AM Best who moderated a panel discussion on Typhoon Haiyan 2013: Role of Insurance in Rebuilding Economies and Communities. What has been learned? Other speakers included the author of an impact assessment study into the role of mutual microinsurance in delivering the SDGs.

“It was a great panel,” says Keenan. “The study shows that mutual microinsurance can be a force for good. It was really insightful and the data shows that the population was better off for having mutual microinsurance. The mutual model is very compelling in the early stages of a microinsurance market - after all, mutual benefit associations for the common good is the defining principle of insurance.”

The GIF was also an opportunity for the MiN to further cement its relationship with the IDF, a public-private partnership between the World Bank, the United Nations Development Programme (UNDP) and global re/insurers. IDF Secretary General, Ekhosuehi Iyahen - who also attended the MiN's recent JMM in Luxembourg - gave the closing keynote in which she emphasised the strength, value and urgent need for the public-private sector collaboration facilitated by the IDF, which is chaired by Denis Duverne, Chair of AXA, also a member of the Network. 

“There’s a clear case for the MiN and IDF to work together,” says Keenan. “The executives of big insurance companies who are IDF members and who see the SDGs as a good cause can act as a bridge between the two worlds of conventional and inclusive insurance.”

For the past few years, the final day of the GIF has been given over to discussions around how insurance can close the protection gap for those most vulnerable to climate and Nat Cat risks. This year, as the GIF was held in Singapore, the IDF Day was focused on the Asia-Pacific region. This focus followed on from a report published earlier this year by the Asian Development Bank, which stated that over 80% of the people most drastically threatened by natural hazards live in developing Asia, and that in the past 20 years, less than 5% of economic losses in developing Asia were insured.

 “It’s an ideal opportunity as there are so many senior executives present,” says Iyahen. “Every year, we seem to see yet another increase in the number of these high-level executives from insurance companies talking about the protection gap and how insurance can help people become more resilient to climate change and natural catastrophes - not only on the IDF day but throughout the entire GIF. The panel led by Andrea was especially important because it gave us a chance, within that context, to delve deeper into inclusive insurance and how we can build markets in those countries which are particularly vulnerable.”

“The MiN has done great work in emerging economies and among low-income populations. I thought the deep dive session at the JMM into Asia, Africa and Latin America really showed the strength of the MiN, demonstrated its technical capacity and the great work by MiN members that we can all harness. However I was struck when I was at the JMM that there was not necessarily an awareness of the IDF in the MiN community, that’s clearly something we have to work on both at a global strategic level and in collaborating in emerging markets,” she says. “I’m certain there will be deeper collaboration in the future, and I hope that an initial step in this direction has been taken with the MiN now on board our Operating Committee (OpCo).”