2023 Europe and Central Asia - Regional Conference on Insurance & Risk Financing

In response to the strong demand from countries and territories to adopt best practices in risk financing and insurance market development, UNDP in collaboration with ADB is organizing a regional conference on Insurance and Risk Financing. This Conference will serve as a multistakeholder platform for sharing knowledge and coordinating actions to foster the development of insurance and risk financing in Europe and Central Asia. The Conference will bring together government representatives, international agencies, IFIs, private sector, think tanks, and academia to share knowledge and coordinate actions, aiming to address key questions in the following areas:

• The current state of risk financing and insurance and its contribution to realizing SDGs, and how it can further flourish effectively in the region;
• The role of international development partners, international financial institutions (IFIs), the private sector, and the need for partnerships to support governments in leveraging the potential of the global risk financing and insurance market to build a more resilient region;
• Strategies to accelerate the development of national and regional disaster financing platforms, other financing tools for disaster risk reduction (DRR), and inclusive insurance.

Outcomes of the Conference

By providing a platform for technical assessments, partnership discussions, outreach, and advocacy, the Conference complemented and supported global efforts in implementing Sendai priority 3. The participants included government representatives and international agencies, who benefited from the perspectives, advice, and solutions presented by international financial institutions, public and private sector, and academia.

The region is facing various challenges against the backdrop of growing anthropogenic pressures on its ecosystems. Climate risks, in an increasing fashion, are also driving the complex emergencies and crises affecting a growing number of countries in the region.

Also, the sustainable management of water, land, forestry, and energy resources often presents challenges for vulnerable households reliant on income generation tied to nature-based/ecosystem services. The financial management of disaster risks presents an important public policy challenge for governments across the region. Statistics show the region suffered over $30 billion of losses in last 20 years due to disasters, majority of which were uninsured and had to be funded by the governments through fiscal resources.

There seems to be low insurance penetration, where most people opine that government will and should compensate for all losses. Other challenges include low insurance education and awareness in most of the countries in the region, lower income levels, and low levels of trust of people in insurance. Average insurance penetration in the region remains less than 1% of GDP and on an average, less than $30 is spent on insurance per capita.

Some of the key challenges discussed during the conference include:

• No explicit policies, strategies, and regulatory frameworks on Disaster Risk Insurance & Financing in most countries
• Limited understanding of risk transfer needs among the stakeholders
• Limited availability of data to accurately price the risk
• Limited technical and financial capacity of the stakeholders
• High operational and transaction costs, making insurance less affordable
• Limited affordability and willingness to pay among general population
• Limited insurance awareness and literacy

Discussion revealed some of the key opportunity areas for the development of insurance and risk financing opportunities in the region. These include:

• Regional, national, and local-level DRF schemes against disasters for protecting assets and economically-critical sectors
• Insurance schemes for public assets and infrastructure against disasters
• Developing open-source risk models and making available the risk exposure data with financial values of assets for insurance
• Supporting green transitions in the region, by protecting against hazards with insurance
• Promoting stronger regional cooperation and increased information exchange

Agenda

Day 1: Tuesday, October 3, 2023

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09:00-09:30 - Introductory Session

09:30-11:00 - Session 1: Financing The Risk, Not The Consequences

11:30-13:00 - Session 2: No One Can Do It Alone - Potential of Insurance and Risk Financing Partnerships in Eastern Europe and Central Asia

14:00-15:30 - Session 3: How To Walk The Talk - Sovereign Level Risk Transfer Opportunities

16:00-17:30 - Action Lab 1: Thematic & Activity Session on Disaster Risk insurance

Day 2: Wednesday, October 4, 2023

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09:00-10:30 - Protecting the majority – Global inclusive insurance examples

11:00-12:30 - Session 6: Risk-informed investments for reaching the SDGs at national and local levels

14:00-15:30 - Action Lab 2: Disaster Risk Insurance: Regulatory and Market Development Issues

16:00-17:30 - Consultative Dialogue: Mapping Project Financing with Insurance & Risk Transfer Opportunities in Central Asia

17:30-18:00 - Discussion, Commitments, Announcements, and Wrap-up Closing remarks

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