Chair: Ivo Menzinger, Swiss Re
PURPOSE: Focusing on the needs of sovereigns, sub-sovereigns, international institutions, and humanitarian agencies in programmes and territories that are usually supported by donors or developments banks, the SHS will foster information flow and coordination of interactions between industry, civil society, multi-laterals and relevant government entities on “macro” solutions.
Work Streams and Priority Actions
- Transaction development: This SHS workstream is focused on the development of a portfolio of new insurance solutions for sovereigns, sub- sovereigns and humanitarian actors in partnership with the InsuResilience Solutions Fund and the Centre for Global Disaster Protection.
Current Status of InsuResilience Solutions Fund (ISF) Pilot Projects
Sri Lanka: On-going
Objective: Improve sustainability of the National Natural Disaster Insurance Scheme (NNDIS) which is currently insuring all un-insured households in Sri Lanka on an indemnity basis against losses from natural disasters.
Achievements: Flood modelling initiated (IDF Risk Modelling Steering Group); MoU with the National Insurance Trust Fund signed in 7/2018, outlining four objectives: (1) improving the understanding of hazards, exposures and vulnerabilities; (2) improving claims management; (3) amending product features; (4) proposing improved broker and reinsurance procurement
Objective: Establish a (pilot) insurance scheme for flood and earthquake risks at sovereign level.
Achievements: Secured buy-in of the donor community, particularly the local office of the Asian Development Bank (ADB); established a working relationship with the National Disaster Risk Management Fund (NDRMF); developed and presented an outline for a national disaster risk hedge to the NDRMF 4/2018; initiated a scoping study on data situation for natural disaster risk modelling (IDF Risk Modelling Steering Group).
Objective: Establish a regional risk pool for ASEAN member states for a faster and more effective disaster emergency response.
Achievements: Dialogue with ASEAN secretariat and Monetary Authority Singapore (MAS) on innovative disaster risk finance; developed and presented an outline of a comprehensive regional pool solution to ASEAN Finance Ministers and Central Bank Governors Committee 4/2018.
- Innovation / product development: The Working Group actively contributes to the “Innovation Labs” of the London Centre and has been involved in the development of guiding principles and best practice, e.g. for structuring of public asset insurance schemes, procurement of public sector schemes and leveraging humanitarian sector data for new products. Expected outcomes by 4/2019. The SHS WG has also been contributing to the development of an IDF report "Practical Guide to the Insurance of Public Assets in the Philippines & Indonesia".
In close collaboration with the World Bank, the Working Group facilitated significant financial commitments (north of USD 200m) from the UK and German governments to establish technical assistance facilities that help
developing countries understand their risks and develop appropriate risk financing instruments for managing natural disasters better. The facilities are now open to financial commitments from other donor governments.
The WG also championed a dialogue on strategic topics such as best practice in placing new public sector schemes and the need for concessional insurance (premium financing). As a result of the latter, the governments of Germany and the UK have set aside funding to pilot premium financing for the most vulnerable countries.
- Capacity building: contribute to capacity building events for government officials organized by the Centre for Global Disaster Protection, InsuResilience Global Partnerships and others
Continue to maintain a platform to foster information flow and coordination of interactions between industry, civil society, multi-laterals and relevant government entities (including the new TAF facilities) on “macro” solutions related topics.
Co-Chair: Ian Branagan, RenaissanceRe and Marc Gordon, UNISDR
PURPOSE: The RMSG is dedicated to improving global understanding and quantification of natural hazards disaster risk, through use, development and sharing of the re/insurance sector’s catastrophe risk modelling capability. Risk literate users in vulnerable countries should be able to access all relevant models and datasets, use them on their preferred platform, develop them further and have trust in the results. The amount of duplicated effort and inefficiency in the risk modelling system should also be reduced.
More information is available in the RMSG 2018 Strategy document.
Theme 1: Improvement of modelling infrastructure:
Building efficiency and reducing cost and duplication in the risk modelling and data ecosystem, through continuous development of open platforms, an industry wide interoperability programme and advocacy of open standards. This is complex; both technically and also because of the number of stakeholder interests involved. This effort has and will be led by the (re)insurance industry and with further development and focus will have clear benefits for public, private and third sector actors in the world of Disaster Risk Finance. The goal is that the industry can deliver this platform and ecosystem as the primary toolset for building and running models outside in the public and third sectors thus delivering a ‘capability building’ approach enabling sovereigns and others to own and manage their risk management.
The RMSG establishes and grows connections across industry and public sector initiatives where advantages can be gained in opening up the risk modelling ecosystem. The RMSG will work to engage partners including industry actors, academic institutions, funding partners, government bodies, with advice from IGOs, NGOs and the Centre for Global Disaster Protection to secure commitment to an outline proposition for the achievement of RMSG aims. Conversations are continuous with DFID, InsuResilience, IGOs, and potential academic partners and RMSG will continue to explore new opportunities with funders and partners.
An example of this is the Interoperability Project, which addresses the challenge of enabling the interchange of models and data sets between model platforms, in order to deliver Transparency, Cost reduction and Accessibility. An Interoperability Technical Working Group (ITWG) has been established to coordinate a forensic technical gap analysis, and (depending on recommendations) is anticipated to deliver software tools, communications, training and recommendations on future standards.
Theme 2: Model and data content: A strategic and funded programme of new model and risk data development, model cataloguing, model accessibility, user research, and open standards advocacy, executed through an international network of partners coordinated by the RMSG. The aim is to increase the availability and use of open risk models and complementary data sets, particularly in countries covered by InsuResilience objectives. Model development will use the open frameworks and tools developed under Theme 1; in addition to ‘demand-led’ projects the programme will define and deliver a set of benchmark ‘strategic’ region/risk models.
- Catrisktools: a free and open access global directory of catastrophe risk assessment tools. This is a searchable database of available commercial and non-commercial catastrophe risk models to help users assess the applicability of existing models for their uses. The directory can be searched by country, peril, licence type, and developer, and provide contact details for obtaining more information or accessing any of the models.
- The RMSG and the IDF Sovereign & Humanitarian Solutions (SHS) are collaborating with the National Insurance Trust Fund (NITF) of Sri Lanka to enhance the sustainability of the National Natural Disaster Insurance Scheme (NNDIS) which provides cover to low income households and micro SMEs. This project will be funded under the InsuResilience Solutions Fund, and pilots an approach for providing RMSG support for other sovereign level risk financing schemes.
- The RMSG is working with UNISDR to undertake a risk model ‘mapping and gap analysis’ and an effort to thoroughly understand the requirements of sovereign and sub-sovereign users in term of risk assessment outputs. The outputs of these activities will contribute to the UNISDR Global Risk Assessment Framework (GRAF).
R&D for wider application: Although not central to its mission, the RMSG also advocates research for the future application of catastrophe risk modelling beyond financial risk transfer to wider problems. It supports a joint initiative between industry and academia to develop an R&D programme for the repurposing of catastrophe modelling to address ‘physical climate risk’. The power of multi-disciplinary risk investigation is highly applicable to decision making in adaptation investment over long timescales, which in turn will create the conditions for new markets.
Chair: Bill Marcoux, DLA Piper
PURPOSE: Developing accessible insurance regulation and public policy frameworks that enable and enhance sustainable development and economic and social resilience to large-scale disasters.
Work Streams and Priority Actions
- Developing a catalogue of regulatory and policy issues that impact the use of risk management tools in vulnerable nations
The LRRP assisted Global Communities in its engagement with a number of Columbian municipalities regarding arranging insurance protection for natural catastrophes. This exploratory work, which is also supported by KFW, has included assessing the legal and regulatory issues surrounding the purchase of insurance by the target communities.
Engagement with IDF Sovereign and Humanitarian Solutions (SHS) Working Group on the InsuResilience Solutions Fund (ISF) Pilot Project in Sri Lanka.
- Engaging with supervisors to create a regulatory framework that local governments can use to further develop their legal and regulatory platforms.
Engagement with the IAIS and the National Association of Insurance Commissioners (NAIC) in the United States, on collaboration considering how regulators and industry can work together to address the insurance needs of sovereign, commercial and personal insureds
Co-Chairs: Shaun Tarbuck, ICMIF, Dr. Joan Lamm Tennant, Blue Marble Ventures and Jan Kellett (UNDP)
PURPOSE: Driving and enhancing coordination and collaboration on microinsurance projects and to maximize the impact and efficiency, both in technical assistance and funding, of resilience-building programs which are operating in local communities vulnerable to climate change.
Work Streams and Priority Actions
- Supporting long-term sustainable solutions that assist communities and countries to be more resilient to disasters by providing risk-pooling solutions co-created by them and tailored to their needs.
- Creating an enabling environment that can promote and advocate for legislative change for a variety of micro insurance models. This will involve mostly legislative change and government advocacy and will build on the IAIS work on microinsurance regulation.
- Creating a market place for practitioners that operates existing and new long-term sustainable microinsurance projects to meet potential donors with the aim of matching them together.
Co-Chairs: Jan Kellett (UNDP) and David Lomas (BlackRock)
PURPOSE: The working-group on investment has the overall objective of increasing the sectors and countries in which insurance investments could operate by exploring how insurers, working with development banks and others, can support the requirements for investment in resilient and sustainable infrastructure in emerging and developing countries.
Work Streams and Priority Actions
There are three inter-connecting work-streams that define this work at present:
- The development of detailed criteria for potential insurance investors in development, including sectors, sub-sectors, countries and impact measurement;
- Advocacy both within and beyond the industry and
- Investigations and discussions around a ‘standalone structure or mechanism’ to underpin this work, including financing mechanisms.