The UNDP Insurance Solution: Climate Resilience and Development through Long-Term Country Engagement
The tripartite announcement made at the UN Climate Summit in October 2019 laid the foundation for an ambitious new initiative, while at the same time representing a major step towards meeting the Partnership’s target. This new initiative of the United Nations Development Programme aims to make insurance and risk financing central to development. Cooperation between the insurance industry and the development sector will be at the heart of this initiative focusing on inclusive insurance and risk financing.
The core of the tripartite agreement between the UNDP, the IDF and the German Government is a comprehensive plan of action for 20 countries by 2025. This plan will focus on inclusive insurance and collaboration with the private sector in risk financing. At this stage, funding will be set aside for the first full three years of activity.
Making a reality of the first ever UNDP strategy for working with the insurance sector
This new initiative will help to make a reality of the first ever UNDP strategy for working with the insurance sector. The strategy will be rolled out to our partners and country offices in the first quarter of 2020 with the launch of a brand-new flagship Insurance and Risk Finance Facility coming very soon after.
The activities of the initiative feature two distinct but interlinked elements:
1. Inclusive insurance will target vulnerability of all types and build on community action and work by mutual and cooperative actors, alongside private-sector microinsurance providers.
2. Sovereign risk will open up conversations between government and the private sector and explore options for finance risk, while the expertise of the insurance industry in modelling risk will be integrated within wider financial planning and management.
The UNDP believes that work on governance will be central to both these elements with significant focus on the development and delivery of products, and major improvements to the long-term enabling environment and the transformation of markets.
Strong partners and combined expertise
Partnership is at the heart of this initiative. The UNDP provides long-term engagement, credibility and working relations with government and communities alike. It also contributes expertise in helping countries to develop legislation, regulation and institutional capacity. The insurance sector contributes capacity for risk, the expertise to model and analyse patterns of risk, and the ability to transform needs into concrete product development and delivery. National governments will have a key role to play with particular emphasis on improvements in governance and institutional capacity.
Networks such as the Insurance Development Forum (IDF), the InsuResilience Global Partnership, the International Cooperative and Mutual Insurance Federation (ICMIF) and the Ocean Risk and Resilience Action Alliance (ORRAA) provide the UNDP and its partner countries with unrivalled technical expertise and capacity, as well as international and national leadership. All these actors will be crucial in taking advantage of short-term opportunities and facilitating long-term integration into country development planning and implementation.
By Jan Kellett (Undp Finance Sector Hub)