IDF Summit: How understanding risk can change the world

Climate change is a very real and increasing threat, especially for those societies which are most vulnerable; but there is hope to combat the impacts of these effects. To do so, however, requires collaboration; it requires sectors to work together, to share insights, data and tools to understand the hazards, the different exposures, and ultimately, to build resilience for those communities who need it most. 

This call to action formed an integral part of the Insurance Development Forum (IDF) 2021 virtual summit on 7th and 8th June; it was also the topic of focus during day one’s session ‘Facilitating Risk Understanding’. 

Moderated by Rowan Douglas, Head – Climate Resilience Hub, Willis Towers Watson and Chair of the Operating Committee IDF, the session’s speakers provided their perspectives on how industry and government can work to facilitate risk understanding.

One key aspect of this is through the use of open source risk modelling technology – a key proposal by the IDF, and one that is recognised and supported by H.E Dr Maria Flachsbarth, Parliamentary state secretary, Federal Ministry for Economic Cooperation and Development, Germany and Co-Chair of the InsuResilience Global Partnership.  

“Risk models can provide decision makers with the information they need – it can help identify climate resilient investment opportunities and unlock finance for climate resilient and sustainable investment,” H.E Dr Maria Flachsbarth said. “Risk finance and insurance can facilitate a shift from reactive crisis response to anticipatory action.”

“The world needs to think more like insurers,” Douglas added. “We have already seen collaboration that has resulted in risk models for flooding, typhoon and earthquake models in the Philippines. It is about creating a facility that supports insurance development and a broader public good.”

But the key to this success, as Eric Andersen, President, AON said, is that it has to be done in a way where everyone understands what is being protected against and why. 

“Nobody is going to put that capital at risk unless they understand what it is they are protecting; it isn’t just about risk transfer, but risk management,” Anderson explained. “This is why partnerships are so important – it provides insights to use models to create a link between the risk and global capital.”

“What we have learnt from the climate emergency and the pandemic is that risk is systemic; one thing leads to another,” Mami Mizutori, Special Representative of the UN Secretary General for Disaster Risk Reduction, UN office for Disaster Risk Reduction, concluded. “The cost benefit theory about putting in money for prevention is becoming a reality in people’s minds; [and by] moving from risk transfer to risk management and reduction, I think that we can save the world together.”

A full list of speakers and sessions can be found here.

To access the IDF Summit 2021 sessions in the On Demand Library, please register here, or if you attended the event, please use the same unique link you received when you registered to access the site.