In three weeks’ time, several thousand participants, from UN Member States to global corporations and science leaders, will gather in Sendai, Japan, for the third decennial United Nations World Conference on Disaster Risks Reduction to adopt a new global agreement on reducing disaster risk.
The new agreement, which will be the successor to the current Hyogo Framework for Action framed in 2005, is set to expand and deepen the role of the private sector and the insurance industry in ensuring the resilience of populations and assets to natural disasters. In particular, the conference has dedicated sessions to emphasise the role of insurance systems to underpin the fundamental resilience of nations and communities to growing risks.
What Role Does the Insurance Industry Have to Play?
There are many lessons to be learned from our industry. With unprecedented losses in the 1980s driven largely by natural catastrophe events, and Hurricane Andrew in 1992, there were a number of insolvencies in Europe, North America and elsewhere across the re/insurance industry. Structural confidence in the global risk-sharing mechanism of insurance was in disarray.
But over the last quarter of a century, the insurance sector, with its science and public policy partners, has firmly established a tried and tested operational system for rationally allocating capital in relation to disaster risks, even at extreme probabilities. It has further developed conditions and standards of behaviour for its customers to reduce risk to the system and to encourage, and sometimes enforce, resilience as a requirement of access to the contingent capital that an insurance policy represents.
Integrating climate and disaster risk into the wider financial system presents the opportunity to help save millions of lives and livelihoods in the coming decades and to protect billions in assets and property in a cost-effective and rational way when weighed against competing priorities.
This is why the importance of the Willis-led 1-in-100 initiative and the R!SE initiative are key movements gaining momentum in this regard. Both are geared to drive awareness and engagement around financial regulation, resilience standards and investment, and increasing access to natural disaster insurance, an area of huge underinsurance.
Join us There
On day 2 of the conference, Willis Group CEO, Dominic Casserley, will be giving the keynote speech at the WCDRR Session on Disaster Risk in the Financial System. This follows Willis’ involvement in the lead-up to Sendai so far: as part of the UN Private Sector Advisory Group, Willis chaired the working group that provided formal input into the new Hyogo Framework and hosted a preparatory conference in London last year with the International Insurance Society attended by HRH Prince Charles.
Also in attendance will be:
- Rowan Douglas, CEO of Willis’ Capital, Science & Policy practice and Chairman of the Willis Research Network
- James Vickers, Chairman of Willis Re International
- Tsuyoshi Noguchi, Managing Director, Willis Re Japan
- Koji Yamamoto, Willis Re Japan Head of Catastrophe Management
- Greg Lowe, Willis Capital, Science & Policy Practice Executive Director
- Sophie Abraham, Willis Capital, Science & Policy Practice Policy Analyst (me!)
The WCDRR marks the first of a series of UN processes taking place in 2015 and 2016. Watch this space…