Bank of England governor Mark Carney has joined a who’s who of insurance executives in a new drive to help developing markets deal with natural disasters.
As members of the Insurance Development Forum, which is backed by the United Nations and the World Bank, they are aiming to bridge the gap between the insurance industry and development agencies. When the forum was launched at the Paris climate change summit last year, it said there appeared to be a “shared bewilderment” between the two groups.
Mr Carney, in his role as chair of the Financial Stability Board, has taken a position on the IDF steering group, along with Lloyd’s of London chief executive Inga Beale, Munich Re chairman Nikolaus von Bomhard and incoming Swiss Re chief Christian Mumenthaler.
Stephen Catlin of XL Catlin, who co-chairs the IDF — along with former New Zealand prime minister Helen Clark and Joaquim Levy of the World Bank — said it was the first time that so many global insurance executives have been involved in a single group.
“I felt for a long time that our industry has been pretty hopeless at speaking with a single voice,” he said. “I didn’t get turned down by anyone, which tells you something. There’s a lot of common interest in this, which is why so many chief executives are involved. We all feel that the product we sell has tremendous social value.”
Some of the most vulnerable countries in the world have long suffered from a lack of insurance coverage for natural disasters. According to Swiss Re, the biggest natural disaster of 2015 was the Nepal earthquake, in which 9,000 people lost their lives. However, the event did not appear on a list of the top six insured catastrophe losses of the year.
Overall, there were $37bn of insured losses from natural catastrophes and manmade disasters last year, but that covered only 40 per cent of the total economic losses. Mr Catlin said the gap between insured losses and total losses was growing.
“It’s about giving more cover for emerging nations, especially for elemental perils which are on the increase,” said Mr Catlin, adding that “solutions range from microinsurance right up to governments, regulators and banks seeing the benefit of having asset protections against catastrophe.”
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