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

ICMIF to play key role in climate resilience initiative launched by UN Secretary-General at COP21

A new initiative to build climate resilience in the world’s most vulnerable countries was launched today by UN Secretary-General Ban Ki-moon (pictured) and 13 members within the UN system at COP21, the Paris Climate Conference.  The new initiative will strengthen the ability of countries to anticipate hazards, absorb shocks, and reshape development to reduce climate risks.

The newly announced initiative, the  UN Secretary-General’s Climate Resilience Initiative — Anticipate, Absorb, Reshape (A2R) — will bring together private sector organizations, governments, UN agencies, research institutions and other stakeholders to scale up transformative solutions. The Secretary-General’s Resilience Initiative will focus on the most vulnerable people and communities in Small Island Developing States, Least Developed Countries, and African countries.

Over the next five years, the Initiative will mobilize financing and knowledge; create and operationalize partnerships at scale, help coordinate activities to help reach tangible results, catalyse research, and develop new tools.

The Secretary-General’s Climate Resilience Initiative will support the work of partners, such as the Africa Risk Capacity, to ensure that by the time the new climate agreement enters into force in 2020,  over 30 countries are provided with USD 2 billion in coverage against drought, flood and cyclones,  including USD 500 million in adaptation financing.  150 million Africans will be indirectly insured.

While much of the attention at Paris is focused on reducing emissions in a bid to keep global temperature rise to less than two degrees Celsius by the end of the century, many climate impacts will continue to increase—including rising sea level and more extreme weather events—even if greenhouse emissions cease, according to the Intergovernmental Panel on Climate Change. A recent report issued by the UN shows that over the last twenty years, 90 per cent of major disasters have been caused by 6,457 recorded floods, storms, heatwaves, droughts and other weather-related events. 

A recent report issued by the UN shows that over the last twenty years, 90 per cent of major disasters have been caused by 6,457 recorded floods, storms, heatwaves, droughts and other weather-related events. 

Secretary-General Ban Ki-moon said, “These are the people who did the least to cause climate change, yet they stand to lose their homes, their jobs, and even their lives because of the growing impacts of climate change.  That is why I have asked the UN system to put together a package of initiatives to address this urgent need.”

Private sector organizations were also identified as having a key role to play in the new initiative and Mike McGavick, CEO of XL Catlin, and also Chairman of the Board of The Geneva Association, attended the launch representing the International Insurance Society and the International Cooperative and Mutual Insurance Federation (ICMIF). McGavick told the Secretary-General and the world leaders assembled at the launch of the huge enthusiasm in the insurance industry for the A2R framework and that the IIS and ICMIF would join the initiative. McGavick told delegates that the insurance industry is working urgently to prepare the world's people for the impacts of climate change saying that our sector has the knowledge and skills to meet the challenges of much of the resilience work ahead.

McGavick addressed each of the areas of focus of the new initiative in turn. Speaking about “Anticipate”, he said that risk modelling is the very gateway to resilience. The insurance industry will continue to support, with funding, knowledge, and through partnerships, efforts to build the next generation of predictive risk models such as through the Resilience Modelling and Mapping Forum.

When discussing the focus area, “Absorb”, McGavick said that today, far too few of the world's people benefit from the resilience offered by risk sharing and transfer schemes. McGavick continued to say that the insurance industry would build on the experience of efforts such as the Caribbean Catastrophe Risk Insurance Facility and the African Risk Capacity. He also mentioned working with the G7 InsuResilience initiative, and initiatives like the Lloyd's Disaster Risk Financing Facility, and ICMIF's 5-5-5 Mutual Microinsurance Strategy for mutual micro-insurance protection which aims to provide insurance cover for an additional 25 million previously uninsured low income people in five countries over five years.

When talking about the third area of focus for the framework “Reshape” McGavick shared with attendees how the insurance industry is funding scientific research and working with governments to adopt advanced building codes and land use practices. Insurance products increasingly replace failing infrastructure with sustainable solutions, including efforts to use natural ecosystems where man made weather defences fall short. The insurance industry is also creating products to try to accelerate the financial viability of alternative energy, said McGavick.

McGavick also announced that the insurance industry would soon launch the Insurance Development Forum.  The forum is a joint effort of partners such as the United Nations Development Programme (UNDP), the World Bank and government agencies, the IIS, ICMIF and a range of insurance companies and brokers, including Willis, Munich Re and Swiss Re. The Forum who will convene adjacent to next year’s IMF-World Bank Spring meetings and the UN General Assembly. It is hoped this forum can help accelerate A2R efforts.

In conclusion, McGavick told delegates that insurers know only too well to approach nature's power with humility; but that through A2R, and through bringing the public and private sectors together, there was hope to find the best path forward.

Speaking from COP21 in Paris, Shaun Tarbuck, CEO of ICMIF, said, "Cooperative and mutual insurers are hallmarked by values that reflect sustainability objectives: protection of individuals, support of the communities in which they live, and development of an environment in which they can thrive.

“Many of them are already demonstrating leadership in addressing the challenges associated with climate and socio-economic change. ICMIF is a founding supporting institution of the United Nations Environment Program – Finance Initiative (UNEP-FI)’s Principles for Sustainable Insurance, to help move our industry towards a more sustainable future, and 2015 is a crucial year for building resilience, reducing disaster risk and moving our industry forwards in the fight against climate change.”

On Wednesday 2 December, Tarbuck will join a more indepth resilience discussion at COP21 looking at the new Framework launched on Monday 30 November and on Friday 4 December he will speak at the Climate Finance session chaired by Janos Pasztor, UN Assistant Secretary General on Climate Change.

Read the full speech by Ban Ki-moon here.