In a brief published earlier this year, IDF member Institute of International Finance (IIF) highlights the role that insurer capital and expertise can play to complement public sector flows to Emerging Markets and Development Economies (EMDEs).
The piece highlights relevant data such as the shifting composition of EMDE capital inflows, with stagnant bank flows and rising portfolio debt; a declining exposure of U.S. insurers to EMs, and how transactions of Multilateral Development Banks (MDBs) and Development Finance Institutions (DFIs) show significantly lower default rates than commercial lending to non-investment grade EMDE corporations. All this while participation of the private sector in infrastructure investment remains limited in many EMDEs.
Showing the deterrents and barriers to insurer investment in EMDEs, the paper advocates for a more integrated approach to this mobilisation. It makes concrete recommendations, including MDB and DFI business models evolving to treat insurance instruments as a strategic product line – and presents a list of priorities.
These priorities speak directly to the Insurance Development Forum’s commitment to bring re/insurers’ long-term capital, underwriting capacity and risk expertise where it is most needed, to build resilience and support sustainable development.
As much of this potential remains untapped, for regulators, finance ministers, development institutions and insurers, the opportunity is to work closer together to drive sustainable development.
We welcome continued dialogue across our membership and partner community and beyond, including Asian Development Bank (ADB), Inter-American Development Bank (IDB), The World Bank, MIGA and IFC – International Finance Corporation, to take this agenda forward with concrete action. To build future-ready nations.
Read Underutilized trillions: Mobilizing insurer capital and underwriter capacity for development finance:
