LONDON (Reuters) – Lloyd’s of London is teaming up with the United Nations Capital Development Fund (UNCDF) to try and improve access to insurance for climate vulnerable countries, with an initial focus on Fiji and Pacific island countries.
Climate change is happening faster and causing more damage than scientists had predicted, accelerating the need for countries and communities to get help that can cushion the financial blow. But far too little money is being spent on protecting populations and many have limited access to support.
The U.N. fund and the Sustainable Markets Initiative’s Insurance Task Force, which Lloyd’s chairs, said on Wednesday they would work together to build insurance products for financial resilience against climate shocks in small island developing nations and least developed countries.
The Sustainable Markets Initiative is a network of CEOs across industries that was launched in 2020 to help build sustainable economies.
“Insurance can serve as a powerful tool, not only in support of climate resilience, but also to secure the delivery of the Sustainable Development Agenda in the world’s most vulnerable countries. To deliver on this promise, we will need innovation and collaboration,” Mourad Wahba, Officer-in-Charge of the UNCDF said in a statement announcing a memorandum of understanding.
Lloyd’s and the UNCDF will also promote public-private partnerships to close “the protection gap” and tackle policymaking challenges holding back climate risk insurance.
After the initial focus on the Pacific, the partnership will seek to roll out the model to Asia and parts of Africa.
John Neal, CEO of Lloyd’s, said that collaborating with the U.N. would help “develop a coordinated global effort to mitigate climate and natural catastrophe risks”.
The UNCDF has previously announced partnerships to grow so-called ‘parametric’ insurance, which guarantees set payouts once a specific event occurs, in Pacific countries.
(Reporting by Tommy Reggiori Wilkes; Editing by Josie Kao)
