Insurance Sector Must Be Central in Boosting Resilience, Sustainability, Inclusion to Guard against Future Shocks, Deputy Secretary-General Tells Leadership Forum
(Delayed for technical reasons)
Following is the text of UN Deputy Secretary-General Amina Mohammed’s video message to the Insurance Development Forum and United Nations Economic Commission for Africa (UNECA) leadership virtual round table on “Better reflecting risk management and insurance in the Sustainable Development Goals (SDGs)”, in New York, 19 October:
Excellencies,
It gives me pleasure to join you for this joint UN Economic Commission for Africa and Insurance Development Forum round table.
More than 18 months into the global COVID-19 pandemic, millions of lives have been lost and the human and economic toll has been unprecedented. Deep inequalities are spread across all dimensions of our societies, from the uneven distribution of income, to insufficient access to health and social protection, gender disparities and digital gaps.
Despite the global economic slowdown, greenhouse gas emissions continue to increase. According to the most recent report by the Intergovernmental Panel on Climate Change, unless we change our current trajectory, we can expect to cross the threshold of a temperature rise of 1.5 degrees in the 2030s.
While reducing emissions is vital, preparing for a future of more frequent extreme weather events is also paramount. Insurance provides an important flow of capital to support communities and infrastructure to prepare and recover when disaster strikes. Without insurance, losses fall largely on individual citizens, Governments and aid organizations.
Insurance is a critical resilience mechanism for individuals, companies and public authorities, that supports the success of the SDGs. And yet, when it comes to insurance, stark global inequalities are holding people and communities back. In developed countries, insurance penetration rates are over 40 per cent. In developing countries, they average between 1 and 3 per cent. This level of under-insurance is both a cause and an effect of a lack of socioeconomic resilience and major gaps in social protection.
Insurance contributes to a wider understanding of risk and promotes measures that Governments, institutions and individuals can use to improve their resilience to disasters. But insurance markets in developing countries have very limited capacity to mitigate risks, compared to the scale of the needs. To solve this, we need a revolution in the insurance world, starting with clear global targets for risk prevention and resilience and encompassing access for all to sustainable insurance products.
Private and social insurance systems must become truly global in scope, in close collaboration with multilateral and financial institutions. Insurance must also be linked closely to policies on social protection, to prevent people — including those working in the informal sector — from falling into poverty.
The pandemic makes it clear that the world must scale up its efforts to become more resilient, sustainable, and inclusive in preparation for future shocks. The insurance industry must have a central role in this transformation.
We are ready to work with you to seize this moment and make this a Decade of Action, transformation and restoration to achieve the Sustainable Development Goals and make good on the Paris Climate Agreement by 2030.
Thank you.