UNDP and Generali partner to develop insurance and risk finance solutions

Venice — The United Nations Development Programme (UNDP) announces a partnership with Generali, a leading global insurer and asset manager, that will support developing countries to access insurance and risk finance solutions that enhance the resilience of communities and local businesses.

Under this multi-year partnership, Generali has committed technical and financial resources to UNDP’s Insurance and Risk Finance Facility (IRFF) in order to increase the socioeconomic wellbeing of some of the world’s most vulnerable people and places. The partnership will blend Generali’s insurance expertise with UNDP’s long-term focus on financing and development.

“On average, the world’s poorest countries lose $29 billion every year from disasters yet a meagre 3% of these losses are covered by insurance,” says UNDP Administrator, Achim Steiner. “This new partnership with Generali will allow UNDP to extend much-needed insurance solutions to vulnerable families and businesses — from smallholder farmers suffering in the face of drought; defending natural capital at risk from climate change in coastal communities; or rolling-out financial protection for people displaced by conflict and instability.”

The partnership will provide financial and technical resources to design digitally enabled parametric insurance solutions that aims to protect vulnerable families and small businesses, develop large-scale risk finance solutions with a focus on cost-effectiveness, and promote thought leadership on human development and social innovation.

“Financial protection, business development and human rights all go hand in hand. Private and public institutions must work together to better understand how insurance solutions can be accessible and affordable for the people who need them the most. Insurance can contribute to socioeconomic stability and, in the event of natural catastrophes, can lead an effective and accelerated recovery,” declared Generali Group CEO Philippe Donnet.

“Insurance should not only be a remedy after natural disasters. Rather, methodologies pioneered by the industry help us gather data and consequently assess potential risk. We therefore acquire a deeper understanding of how and when to reduce the impact of potential losses. We are eager to help shape UNDP’s ambitious agenda of protecting lives, building resilience and driving inclusive economic growth,” Donnet added.

In addition, under Generali’s social philanthropy movement – The Human Safety Net – the partnership will look at the role of venture philanthropy in protecting lives and livelihoods, especially those of children and refugees. Over the course of this multi-year collaboration, both organizations will encourage innovative social entrepreneurship projects in the space of insurance and risk finance. The world is at a tipping point. More than three billion people are now highly vulnerable to climate change, driven by vulnerable ecosystems and unsustainable development patterns that will lead to gruesome global impacts: 31 million people were internally displaced due to disasters in 2020; 47% of species are under serious climatic threat; up to $14 trillion of coastal global assets could be lost forever due to floods by 2100; and annual global economic losses due to disasters frequently exceed US$250 billion.

Developing countries are at the forefront of these impacts and, unlike developed countries, insurance solutions have yet to make a significant impact on financial resilience. Just 5% of annual losses from disasters are covered by insurance in developing countries and just 3% of individuals in developing countries have insurance of any kind. There is a massive shortfall in protection and socioeconomic resilience which this partnership hopes to address.

 

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