In 2020, the IDF turned five years old, following its establishment at the United Nations Conference of the Parties (COP21) Paris Climate summit in 2015 and official launch by leaders of the United Nations, the World Bank and the insurance industry in 2016. We caught up with Jan Kellett to reflect on progress to date, and the activities that will shape the future of our innovative and proactive organisation.
“The IDF is a unique programme for the UN because of the level of engagement with the private sector.”
1. Tell us a little bit about yourself
I work for the UN development programme, the operational development arm of the UN with a strong focus on country level activity and delivery. I have a background in finance and am the corporate lead for issues of insurance and risk financing, and it’s a growing area, partly because of the involvement with the IDF.
2. When did you begin your partnership with the Insurance Development Forum (IDF) and why did you choose to partner with them?
My engagement with the IDF started right at the beginning, so it’s been a huge pleasure to be involved with the progress since that first meeting in 2015. I’d seen other projects that didn’t really deliver much, and was looking for something that would take more concrete steps to improve global financial resilience.
We knew from the development side of things that we wanted to work with the insurance sector because of their ability to model and price risk, which is fundamental to sustainable development, but we didn’t really have a vehicle to translate that into country-level programmes until we worked with the IDF.
3. Tell us about the work you do with the IDF, including any past or present projects that you are most proud of.
I co-chair the IDF at the technical level, and have worked with the many other leading figures from the public and private sector involved with the development of the IDF to date – and there have been highs and lows!
At the start it was tough to get the direction formalised, but after around two years we secured industry financing for the secretariat, which was a real milestone moment in 2018 – up until that point there had been a number of projects in the hopper, but they hadn’t got off the ground.
It’s only really been in the last 18 months that the momentum has gathered, and the ground-breaking Tripartite Agreement was the key part of this, with its promise to deliver risk financing solutions in 20 countries by 2025.
It’s a unique programme in the UN because of the level of engagement with the private sector. We come at it from two different perspectives – the large-scale, government level risk financing and protection of national assets, and then the individual and business level focus on inclusive insurance.
Both are critical elements to closing the protection gap at national level – where 50% of developed country assets are protected by insurance compared to just 5% of developing countries, which are more likely to be hit harder by disasters – and individual level, where there is a need to improve the understanding of what insurance does.
We have already made the first implementation in earnest in 2020 with an agreement for a PPP project to develop an insurance programme for Peru’s public schools.
4. What are the key goals that you will be focussing on in the next 12 months?
The bottom line in terms of progress with our engagement with the private sector is that large companies are now willing to put resources into countries that they may not otherwise have done, and we want to expand the list of countries in which the insurance industry feels comfortable operating. Partnerships with the public sector under well thought out frameworks through the IDF delivery programmes are key.
The Peru project was the proof of this concept, and I certainly see the Tripartite delivering further projects designed to increase resilience for countries vulnerable to climate change. We are in conversations with seven to eight national governments around protecting assets like agriculture and transport infrastructure, and I would expect to see three to four of these initiatives move forward in the coming year. We are also working on long-term transformation of the risk financing market in those countries.
This is the top-down angle, but we would also like to see movement in the inclusive insurance side with a similar model of engagement, so the IDF can also start to move on the bottom-up aspect of insurance, focusing on closing the protection gap for families and communities.
5. How do you plan to achieve this by working in partnership with the IDF?
It’s a developing conversation, and I think the UN Sustainable Development Goals are really helping turn the tide on this. The targets underpinning those goals are so huge that we need private sector support as critical foundations of development itself.
Our partnership with the IDF is unique and powerful for many reasons I’ve outlined above, but I think another key development I’d like to see progress further is more open access to risk modelling capabilities in developing markets. It really is true that models make markets – and if we can produce more cost-effective, open source and high quality models that can be used by the public and private sector to generate policies that transfer risk then we’re on to a win win.
If you could issue one call to action for improving resilience around the world, what would it be?
I would say a simple one: to realise that risk and development are entirely the same thing seen from two different directions. I would like governments to integrate risk-based thinking into every single aspect of country life and living.
18th February, 2021