Extending mutual microinsurance to 5 million uninsured households in five countries over five years.

Facing growing natural disaster risk: ICMIF members join United Nations, World Bank Group and insurance industry to create more resilient economies

September 28th saw an ambitious insurance-led risk management strategy get the green light from the Insurance Development Forum (IDF). This first-of-its-kind collaborative effort spanning the United Nations (UN), the World Bank Group, and the insurance industry aims to promote economic recovery and resilience in vulnerable regions facing climate events and natural disasters.

This innovative public/private partnership is in line with the UN Agenda 2030 and will contribute to achieving the G7 InsuResilience target of 400 million of the most vulnerable people in developing countries being provided with increased access to direct or indirect insurance coverage against the impacts of climate change and related natural catastrophes by 2020

Stephen Catlin, Executive Deputy Chairman XL Group chairs the IDF, with Co-Chairs Joaquim Levy, World Bank Group Managing Director and Chief Financial Officer, and Helen Clark, Administrator of the United Nations Development Program. Other Steering Committee members include Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, and 13 insurance industry CEOs – which include ICMIF members Kathy Bardswick, President and CEO, The Co-operators Group (Canada); and Jean-Louis Davet, CEO, MGEN (France).

Speaking on behalf of ICMIF, Shaun Tarbuck, CEO, said: “The insurance industry has needed a platform from which to influence global policymakers and I believe the IDF and the Steering Committee are uniquely placed to do this. In Kathy Bardswick and Jean-Louis Davet we have two excellent representatives for the mutual and cooperative sector on the Steering Committee that will help deliver the Post 2015 Agenda through this unique public/private partnership.”

Shaun Tarbuck will be co-chairing the IDF Micro-insurance Working Group, on behalf of ICMIF and its members, together with Joan Lamm-Tennant, CEO of Blue Marble Microinsurance. Speaking about the Micro-insurance Working Group and this partnership, Shaun Tarbuck said: “Blue Marble Microinsurance brings a unique approach to microinsurance supported by its eight large insurers and our belief is that their work will complement the ICMIF 5-5-5 Strategy well. The work of the IDF’s Micro-Insurance Working Group has already started with meetings and phone calls to establish our strategy and the creation of the group of 30+ people is in progress. ICMIF members have made a serious and wholehearted commitment to playing our part in the climate change debate and in providing resilience solutions that are both practical and properly funded. We have a big task ahead but now we have the appropriate framework, governance and engagement from both business and civil society to get the job done,” Tarbuck concluded.

About the 5-5-5 Mutual Microinsurance Strategy

In January 2015, ICMIF launched the 5-5-5 Mutual Microinsurance Strategy to help mutual microinsurance reach its full potential scale in a number of emerging markets and thereby having a positive impact on the lives of millions of low-income households. Over the course of five years, ICMIF plans to develop mutual microinsurance in five countries, reaching out to 5 million uninsured low-income households, which will equate to 25 million people in total, a quarter of the G7 goal for the private (insurance) sector of 100 million new policyholders (of the total 400 million newly insured by 2020).

The five countries (Colombia, India, Kenya, the Philippines, and Sri Lanka) were selected due to several factors including the fact that they are already doing prominent work in the field of mutual microinsurance, ICMIF member presence in that country and geographic reach.

The participation of Shaun Tarbuck, CEO of ICMIF, and four leaders from ICMIF member organizations Thrivent Financial, USA; MGEN, France; Desjardins, Canada; and Covéa, France, in the B20 Financing Growth Taskforce is also helping to further the work and reach of the 5-5-5 Mutual Microinsurance Strategy. The Financing Growth Taskforce Policy Paper presented to the G20 at the B20 Summit held in Hangzhou, China, in September 2016, included the recommendation to Leverage mutual insurance and microinsurance to protect less privileged people with a presentation of the ICMIF 5-5-5 Mutual Microinsurance Strategy as a case study.

Comments from the IDF

“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 Catlin. “The world is watching to see whether this unique public and private sector partnership can deliver results that will use insurance industry risk management skills to build resilience that benefits economies and families.”

Helen Clark, IDF Co-Chair and Administrator of the United Nations Development Program (UNDP) commented: “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. 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. I agreed to co-chair the Insurance Development Forum because I believe it can make a real difference in addressing these challenges.”

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. The World Bank Group is engaged in more than 40 countries in the design of financial protection strategies, including reforms on public financial management and financial instruments and also in the development of risk-mitigation strategies. But more needs to be done, and we cannot do this alone. We stand with the Insurance Development Forum and its partners to facilitate our activities and use risk management instruments in helping eradicate poverty and raise shared prosperity.”

Rowan Douglas, chair of the IDF Implementation Committee, and head of the Capital Science and Policy Practice at Willis Towers Watson, said, “We are grateful for the Steering Committee’s guidance. We will now move forward to the next stage of implementation with partners across the industry, governments, international institutions, NGOs and academia. My thanks to more than 200 experts and practitioners who have worked tirelessly over the past five months to bring this together and especially the Working Group co-chairs that have created a remarkable global organization so quickly.  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. We will redouble our efforts between now and our next major milestone and the World Bank-IMF Spring Meetings in Washington DC next April.”