Insurance Industry Presence Supports UN’s Disaster Risk Reduction Quest

March 16, 2015

The re/insurance industry has answered the call presented by the UN’s Disaster Risk Reduction initiative, as industry representatives gathered with others to attend the 3rd UN World Conference on Disaster Risk Reduction in Sendai, Japan.

The insurers called on governments, Saturday, to “step up global efforts to build resilience against natural disasters, highlighting that average economic losses from disasters in the last decade amounted to around $190 billion annually, while average insured losses were at about 60 billion.”

It has taken some time for the re/insurance industry to realize that it has more collective information, and more overall experience, in identifying, assessing and managing risks than anyone else, including most governments. It has been doing it for more than 200 years, and putting that experience to work for the good of the world is a significant step in realizing the UN’s goal of reducing losses to life and property caused by disasters.

The “United for Disaster Resilience Statement” was released at the opening of the conference by re/insurers who are members of the UNEP FI Principles for Sustainable Insurance (PSI)—the largest collaborative initiative between the UN and the insurance industry. PSI is backed by insurers representing about 15 per cent of the world’s premium volume and $9 trillion in assets under their management. [see list below]*

“The Statement urges governments to adopt the UN Post-2015 Framework on Disaster Risk Reduction, emphasizing that the insurance industry is well placed to understand the economic and social impact of disasters given that its core business is to understand, manage and carry risk,” said a bulletin from the conference.

It also “underscores the value of disaster risk reduction, especially in the context of climate change adaptation, and the need for climate change mitigation. It welcomes the inclusion of the private sector in the new global framework for disaster risk reduction, which is expected to be adopted in Sendai.”

Achim Steiner, UN Under-Secretary-General and Executive Director of the UN Environment Program (UNEP) commented: “Building disaster-resilient communities and economies for the future will require an ‘all hands on deck’ approach. Public-private collaboration is key to the success of such efforts.

“The vision and initiative demonstrated by the insurance industry—from the launch of the landmark Principles for Sustainable Insurance at the Rio+20 conference to the strong, united commitments made, here, in Sendai—provide inspiration and a way forward,” he continued.

Steiner also pointed out that disasters “undermine hard-earned development gains and perpetuate poverty. Over one million people lost their lives due to natural disasters in the last one hundred years and the numbers have almost doubled in the last decade alone, with average economic losses estimated at $190 billion annually. Building resilience against natural disasters, exacerbated by climate change, is a global priority that calls for decisive and urgent action by multiple actors at all levels0.” he added.

UNISDR head, Margareta Wahlström, the Special Representative of the UN Secretary-General for Disaster Risk Reduction said: “The vision outlined by the insurance industry in shaping a resilient and sustainable future should inspire other industries to do the same. The strong engagement of the private sector is crucial to reducing disaster risk and avoiding the creation of new risks. Through its united stance on and commitment to disaster resilience, the insurance industry is leading by example.”

The reinsurance industry has been asked to become directly involved in the UN’s initiatives. A PSI program, launched in Sendai, called on individual insurance organizations to help implement the Post-2015 Framework for Disaster Risk Reduction “by making voluntary, specific, measurable and time-bound commitments. These initiatives are in line with the PSI’s vision—a risk aware world, where the insurance industry is trusted and plays its full role in enabling a healthy, safe, resilient and sustainable society.”

The conference bulletin said the “voluntary commitments will follow the global framework afforded by the four Principles for Sustainable Insurance, and will show concrete actions that build disaster resilience, and promote economic, social and environmental sustainability.

“These commitments will be aggregated and promoted en route to a major UNEP and insurance industry event this May, which will be hosted by the global reinsurer, Swiss Re. The commitments will also be promoted by the PSI at the Global Insurance Forum of the International Insurance Society in New York this June.

“The forum will include a dedicated day at the UN headquarters for insurance industry leaders and UN officials to address sustainable development challenges and opportunities, from climate change and disaster risk, to financial inclusion and ageing populations.”

Michael Morrissey, President & CEO of the International Insurance Society, a signatory to the statement said: “Managing risk is core to the purpose of the insurance industry. Recognizing the unique roles of the insurance industry as risk managers, risk carriers and institutional investors is key to harnessing its full potential in disaster risk management, and in supporting the transition to a sustainable economy. We look forward to strengthening our collaboration with the UN in this milestone year for sustainable development.”

Source: UN World Conference on Disaster Risk reduction

*There are many well-known companies on the list. Re/insurers include Aviva, AXA, Insurance Australia Group, Mapfre, Munich Re, RSA, Samsung, Sompo Japan, Swiss Re and Tokio Marine. A number of companies and organizations affiliated with the insurance industry have also signed up, including the International Insurance Society and RMS.

Topics Reinsurance Market Climate Change Risk Management

Was this article valuable?

Here are more articles you may enjoy.