UNDP launches new risk insurance and financing mechanism

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The United Nations Development Program (UNDP) announced an initiative to strengthen the protection of vulnerable communities against socio-economic, climatic and health disasters.

The Insurance and Risk Finance Facility (IRFF), established in the financial sector hub, would significantly increase the role of insurance and risk finance in development.

The German government has contributed 35 million euros to the financing of the facility in order to achieve the objectives set at the United Nations Climate Action Summit in 2019.

The UNDP notes that disaster recovery costs the world’s 77 poorest countries an average of $ 29 billion per year, of which 3% is insured.

The United Nations Development Program (UNDP) announced an initiative to strengthen the protection of vulnerable communities against socio-economic, climatic and health disasters.

RMS

The Insurance and Risk Finance Mechanism (IRFF), established within the financial sector cluster, would significantly increase the role of insurance and risk finance in development.

The German government has contributed 35 million euros to the financing of the facility in order to achieve the objectives set at the United Nations Climate Action Summit in 2019.

The UNDP notes that disaster recovery costs an average of $ 29 billion a year for the world’s 77 poorest countries, of which 3% are insured.

In 2020 alone, 980 disasters caused by natural hazards cost the global economy more than US $ 210 billion. Following the COVID-19 crisis, 150 million people have been pushed back into poverty.

The ambition is to co-create insurance and risk financing solutions in more than 50 developing countries by 2025, to integrate them into public financial decision-making and to contribute greatly to the InsuResilience Vision objective. 2025 to protect 500 million poor and vulnerable people by 2025.

“Building the financial resilience of countries and communities is an essential part of tackling climate change and safeguarding past and future development gains. Germany is firmly committed to the InsuResilience global partnership to strengthen protection against climate impacts, ”said Dr Maria Flachsbarth, Parliamentary State Secretary, German Federal Ministry for Economic Cooperation and Development (BMZ).

“The global community made a commitment at the United Nations Climate Summit in 2019, and all of us – governments, industry, development sector – must step up our work to enable climate-proof development.

Under the IRRF, UNDP will drive change at the country level by working with governments to include climate risk modeling work in national development plans and financing strategies, nationally determined contributions, national adaptation plans and more.

“Risk finance and insurance solutions help respond effectively to disasters and help countries better prepare for the impacts of climate change and other shocks by reducing humanitarian impacts, strengthening people’s ability to recover.” more quickly and by building the resilience of communities. In 2020 alone, more than 200 projects in more than 100 countries contributed to the InsuResilience global partnership, protecting 137 million more people.

“The insurance industry recognizes that the new challenges we collectively face – the climate crisis being the most important of all – require public-private solutions,” said Denis Duverne, Chairman of Axa and Chairman of Insurance Development Forum.

“We welcome the investment that UNDP is making through the launch of its insurance and risk finance mechanism to work with the insurance industry at this critical juncture.

“This demonstrates the progress made by the insurance and development community and will allow us to increase results on the ground. “

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