Generali and UNDP sign deal to ‘shape a new history’

Italy-based global insurer  Generali and the United Nations Development Programme (UNDP) have agreed a partnership to “shape a new history” by providing greater access to insurance and risk finance for developing countries.

Under the deal, Generali will provide technical and financial resources to UNDP’s Insurance and Risk Finance Facility (IRFF) to boost insurance protection, as “nearly half the global population is now highly vulnerable” to the impacts of climate change.

Speaking from the launch of the agreement in Venice, Daniel Stander, UNDP senior advisor, told Intelligentinsurer.com, the partnership would build on “our shared commitment to ‘leave no one behind’,” and provide resources for the design of digitally-enabled insurance solutions to protect vulnerable families and businesses.

“For instance, that means providing solutions for smallholder farmers suffering in the face of drought; defending natural capital at risk from climate change in coastal communities; or rolling-out financial protection for displaced people. And, recognising that development is not sustainable unless it is risk informed - together we will advance thought leadership on human development and social innovation,” he said.

In addition, under Generali’s social philanthropy movement – The Human Safety Net – the partnership will examine the role of venture philanthropy in protecting lives and livelihoods, especially those of children and refugees. Throughout this multi-year collaboration, both organisations will encourage innovative social entrepreneurship projects in insurance and risk finance.

Philippe Donnet (pictured), Generali Group CEO, said: “Financial protection, business development and human rights all go hand in hand. Private and public institutions must work together to better understand how insurance solutions can be accessible and affordable for the people who need them the most. Insurance can contribute to socioeconomic stability and, in the event of natural catastrophes, can lead to an effective and accelerated recovery.”

Donnet said: “Insurance should not only be a remedy after natural disasters. Rather, methodologies pioneered by the industry help us gather data and consequently assess potential risk. We therefore acquire a deeper understanding of how and when to reduce the impact of potential losses. We are eager to help shape UNDP’s ambitious agenda of protecting lives, building resilience and driving inclusive economic growth.”

Jan Kellett, UNDP team leader: Insurance and Risk Financing, said the partnership launch was happening “as the world faces a climate crisis that is now ‘widespread, rapid, and intensifying’. Nearly half the global population is now ‘highly vulnerable’ to its impacts.”

Climate change is having a disproportionate impact on some of the world’s most vulnerable communities. “On average, the world’s poorest countries lose $29 billion every year from disasters. Yet a meagre 3 percent of these losses are covered by insurance. At the same time, the COVID-19 pandemic has stretched the thin finances of developing countries to breaking point. In short, dealing with climate change has become an extremely costly reality,” Kellett said.

Stander added: “The facts are irrefutable. Insurance protects lives, drives growth, and builds resilient economies while accelerating progress across the Global Goals. And innovative networks like the Human Safety Net are unlocking the potential of people living in vulnerable circumstances - so that they themselves can transform their lives - as well as their families and communities.

“Therefore, it is fitting that this launch takes place in Venice - the birthplace of modern finance and banking - and now with the ambition to become the world capital of sustainability. Through our joint efforts, we can shape a new history - one where everyone has a future to look forward to.”

Research by the Norwegian Refugee Council's Internal Displacement Monitoring Centre and the IPCC has found that the world is at a tipping point. More than three billion people are now highly vulnerable to climate change, driven by vulnerable ecosystems and unsustainable development patterns that will lead to gruesome global impacts. In 2020, 31 million people were internally displaced due to disasters, 47 percent  of species are under serious climatic threat, up to $14 trillion of coastal global assets could be lost forever due to floods by 2100; and annual global economic losses due to disasters frequently exceed $250 billion.

A joint statement from the IRFF and UNDP emphasised that developing countries are at the forefront of these impacts and, unlike developed countries, insurance solutions have yet to make a significant impact on financial resilience. Just 5 percent of annual losses from disasters are covered by insurance in developing countries and just 3 percent of individuals in developing countries have insurance of any kind. There is a massive shortfall in protection and socioeconomic resilience which this partnership hopes to address.

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