An inception workshop on the InsuResilience Project in Ghana under the UNDP Inclusive Insurance and Risk Finance Facility (IRFF) was launched in Accra this week.
The IRFF/IDF Ghana project seeks to develop a parametric flood insurance cover, enabling timely pay-outs of disaster relief funds and building the capacities of public assets and stakeholders.
It will enhance authorities’ response capacity to flood events, with a focus on the re-establishment of economic activity in poor & vulnerable communities.
In a speech read on behalf of the Resident UNDP representative, Angela Luisgi, she noted that increasing affordable access to insurance and risk financing has a critical role to play in delivering the SDGs and reducing the impact of weather/climate-induced disasters on development.
She added that while disaster risks are on the increase, there is a huge protection gap in developing countries – where less than five percent (5%) of disaster losses are covered by insurance versus 50 percent (50%) in high-income countries.
Financial exclusion – the absence of legislation for mutual and cooperative insurance in developing countries – and a wide range of demand and supply issues contribute to this disparity, and to the subsequently diminished resilience of most vulnerable communities.
Flooding is currently among the major disaster risks in Ghana which are not targetted by a public insurance initiative. Over the past years, progress has been made in developing innovative parametric insurance solutions for floods/drought in agriculture/ rural contexts (e.g., excess rainfall or excess soil moisture).
The InsuResilience Solutions Fund (ISF) Project C 5.23 brings together the Insurance Development Forum (IDF) members Allianz and Swiss Re, with technical partners (HKV) and service providers (ICEYE, Flood Tags), as well as UNDP to co-develop a sovereign disaster risk insurance cover for Ghana, and the long-term investment to integrate insurance and risk financing into development strategies.
As the Human Development Report shows, insurance alongside both investment and innovation are key ways for countries to both tackle uncertainty and enhance financial resilience, thus delivering better and more inclusive development.
An operational example of a public-private partnership aiming to scale-up disaster risk finance and insurance solutions is the Tripartite Agreement – signed in 2019 at the UN Secretary-General’s Climate Action Summit between the UNDP, German Federal Ministry for Economic Cooperation (BMZ), Insurance Development Forum (IDF) and 10 of the world’s largest insurance and reinsurance companies.
The workshop’s aim was to officially kick-off the project and bring together all relevant stakeholders needed for its successful implementation, and discuss its scope as well as design.