NEW YORK, 6 October 2016 – A new public-private partnership between the leaders of the United Nations, the World Bank and the insurance sector has adopted a risk management strategy that seeks to harness insurance to promote economic recovery and resilience to climate hazards and disasters.
The Insurance Development Forum (IDF) said that it has decided to contribute to achieving the G7 “InsuResilience” target of providing 400 million of the most vulnerable people in developing countries with increased access to direct or indirect insurance coverage against the impacts of climate change and related natural catastrophes by 2020.
“For many developing countries with scarce resources, rebuilding is often beyond their means. Typically, a disaster is followed by appeals to bilateral, regional, and international partners for aid relief and financial support,” said Ms. Helen Clark, IDF Co-Chair and Administrator of the United Nations Development Programme.
“This support, however, often falls well short of what is required. Systemic lack of funds and recurrent inefficiency of recovery initiatives on the ground impede progress. Insurance can be an efficient, fast-disbursing mechanism to build back better in vulnerable countries and communities hit by disasters, but also to reduce risks and the costs of risks in the long term.”
The IDF was first announced at the COP21 UN climate summit in Paris in December 2015 and officially launched in April 2016.
It is led by a Steering Committee, chaired by Mr. Stephen Catlin, Deputy Executive Chair of XL Group Ltd., with Co-Chairs Ms. Clark and Mr. Joaquim Levy, World Bank Group Managing Director and Chief Financial Officer. Other Steering Committee members include Mr. Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, and Mr. Robert Glasser, the UN’s Special Representative of the Secretary-General for Disaster Risk Reduction, as well as 13 insurance industry CEOs. Additional governmental and public sector organizations are expected to engage in the coming year.
The IDF adopted its insurance-based strategy when it met on the sidelines of the recent UN General Assembly session. It approved a proposal to create a Technical Assistance Facility (TAF), which will assemble public and private insurance industry resources and tools necessary to support governments in building public-private partnerships that will better manage the financial consequences of climate events and natural disasters while increasing the use of insurance in emerging markets and developing countries. Work has begun to secure funds for the programme.
The IDF’s work is linked with a string of UN agreements adopted in 2015 to set the global development agenda for years to come. They include the Sendai Framework for Disaster Risk Reduction, the Sustainable Development Goals and the Paris Agreement on climate change.
“With growing natural disaster losses it is essential that governments learn how to incorporate risk management fundamentals into their planning, budgeting and governing processes so that their citizens can be better protected,” said Mr. Catlin.
Joaquim Levy, IDF Co-Chair and World Bank Group Chief Financial Officer stated that “many emerging market and developing countries lack sufficiently developed insurance markets, which does stifle growth and has a negative impact not only on business but on general welfare, notably among the poorest. The lack of insurance instruments or broader risk-pooling or risk-mitigation mechanisms is also evident in the public sector, affecting government’s ability to respond to natural disasters and other large-scale events”.
Mr. Rowan Douglas, chair of the IDF Implementation Committee and head of the Capital Science and Policy Practice at Willis Towers Watson, said, “We all recognize a unique moment and opportunity to make a huge step forward in the protection of lives, livelihoods and communities – realizing the benefits of insurance across public, private and mutual and cooperative sectors.”
The IDF focuses on members of the “Vulnerable Twenty Group”, which was set up in 2015 and groups the finance ministers of countries highly vulnerable to a warming planet in dialogue and action to tackle global climate change.
Dear Prime Minister,
As you know we have had many discussions in person, by text and by phone on the matter of my candidature for the position of UN SG over the last six months or more since you became PM.
You will also recall that we discussed this matter on many occasions prior to you becoming PM as well
You will recall that last September I contacted you asking for guidance on how I should address the matter of your previously stated support to me for my candidature when I met Foreign Minister Bishop at the UN General Assembly in September. You in fact sent me a message on your preferred Wickr system where you stated that you and the FM were “as one” in your support for my candidature.
You will also recall I came to see you in your Parliament House office on 11 November last year where we discussed the matter at length. Once again you restated your position of support for my candidature. You went further to ask for a list of governments whom you would need to lobby at a prime ministerial level in the future.
We continued this discussion further on Wednesday 23 December in your Sydney office. Once again you stated your support for my candidature. You added that when the time came to lodge my nomination, you now wanted to take it to Cabinet to avoid the perception of a “captain’s pick”. You also said to me that the Cabinet process would not change the outcome.
Based on those assurances, in good faith, I have been informally sounding out governments around the world in terms of their support for my candidature. In fact the Foreign Minister confirmed that I was doing that in one of her more recent press conferences. You will appreciate that I would not have been in the business of approaching governments, even informally, had you expressed any doubt about my candidature in any of our previous conversations.
These communications leave to one side the multiple conversations we had on the subject of my possible candidature prior to you assuming the Prime Ministership. You had always said to me that the Australian government would be “mad” not to support my candidature. You will recall saying the same in person to me when we met at my place in New York last year.
You will be aware that my formal written request for support from the government was lodged with your office one month ago. In that written request, I indicated the timing of Cabinet consideration was of course a matter for you; but that I needed to be fully compliant with UN protocols which would require nominations to be lodged with the UN by early May.
You will understand therefore how shocked I was to receive your telephone call within the last couple of hours, just prior to your taking the matter to Cabinet in Canberra. In your telephone call you said that neither you nor the Cabinet would be supporting my nomination. When I asked the reasons for this, you said that neither you nor the Cabinet has the view that “I had the qualifications for the position”. You will appreciate that you have never expressed that view to me in the multiple conversations we have had on this matter on the past.
As you are now taking the matter to Cabinet, could I respectfully request that you reconsider the government’s position. I believe it is important for an Australian to be considered for such a position by the international community. Furthermore, I have been encouraged by multiple governments around the world, from all continents, to be a candidate.
Finally, you will appreciate that I have consistently demonstrated a practice in office of appointing leading individuals from both sides of politics to significant diplomatic appointments abroad. My request for support of my nomination is not even a request for an appointment. It is simply a request for a nomination. I note that the government of New Zealand has adopted this practice in relation to former Labour Prime Minister Helen Clark. Based on your many statements to me over a long period of time, I had expected from you at least the same approach.
It would then simply be a matter for the international community to decide who was the best candidate for the role.
26th Prime Minister of Australia.