Protecting global growth and prosperity

Nearly 400 natural catastrophe events in 2018 generated initial estimates of global economic losses of $225bn. Just $90bn was insured. According to Aon’s Impact Forecasting team, uninsured losses totalled $2trn over the last decade. And developing countries are hardest hit, with 76% of economic losses from natural disasters in Asia and Latin America/Caribbean uninsured in 2018. So what can be done to eliminate this ‘protection gap’?

Disaster risk finance has rightly become a high priority for the development and the international NGO community. The logic is simple: if citizens, communities and economies are resilient to catastrophe and climate risk, lives can be saved, damage can be minimised, services can be restored, and life can be improved.

All sectors have key roles to play. National governments have a role in developing and regulating markets, the development sector has a role in stimulating the process of protection and economic growth, and the private sector ultimately provides jobs and growth at scale.

But even though there’s a widely held belief that there is ‘ready’ capital to build disaster resilience in the developing world, more needs to be done to make resilience and rapid recovery a reality.

Everyone needs to work together to identify and address the challenges preventing us collectively finding solutions that we can scale. We need to share successes and failures from both the public and private sectors. And we need to work out what each stakeholder in the value chain can do differently and what are our respective roles and responsibilities.

For example, according to Sid Miller, Chief Executive of the Earthquake Commission (EQC), close collaboration, understanding and respect enabled the EQC to balance the needs of public sector accountability against the commercial drivers of the private sector, reducing New Zealand’s vulnerability and exposure to natural hazard events.

Trust and partnership are vital ingredients that will make a difference. And there is a huge opportunity for the private sector to step in and step up to help both developing countries grow and identify ways to enable developed and middle income countries build resilience against climate change while boosting the economic and humanitarian impacts.

The insurance industry is committed to finding solutions to close the protection gap by working with governments, humanitarian organisations and NGOs to protect their people and property before and after catastrophes. It’s why Aon is working with a group of them to host a conference in February to try to drive progress.

At the event, you can hear more from EQC’s Miller, alongside CBI Vice-President Lord Bilimoria who will share how collaboration among the business community can help solve the world’s most pressing social issues.