Insurance and reinsurance leaders have teamed up with the United Nations and the World Bank Group to find ways for governments to better use and apply knowledge on reducing disaster risk and building resilience frameworks.

They are also working to build a more sustainable and resilient global insurance market in the face of increasing natural disasters and climate risk.

Of particular concern are developing world countries where more than 90 per cent of economic costs of natural disasters are uninsured; this is known as the ‘protection gap’.

A high-level meeting was held in Washington DC last week, which led to the formation of the Insurance Development Forum. It is to be co-chaired by Stephen Catlin, executive deputy chairman of XL Catlin.

Mr Catlin is also the chairman of the Association of Bermuda Insurers and Reinsurers.

He said: “My grandchildren expect me to make responsible decisions that affect their future.

“Insurers’ risk management skills help us assess natural disaster risk and can be exported to allow governments at all levels to reduce future losses by designing in resilience into infrastructure projects; and in increasing the use of insurance as a pre-disaster economic resource to allow people to protect their families, property and assets.

“Risk identification, measurement, pooling and diversification are essential features of any successful insurance programme and regulation must recognise their value and purpose.”

He added: “These skills can increase the utilisation of insurance which will reduce the reliance on post-disaster aid and better target resources to the most important and needed humanitarian crises.

“Research has shown that a 1 per cent increase in insurance penetration can reduce the disaster recovery burden on taxpayers by 22 per cent.

“The IDF brings together the resources of the broader insurance industry reflected in the membership of the International Insurance Society, The Geneva Association, the International Cooperative and Mutual Insurance Federation and Abir.”

Ban Ki-moon, UN Secretary General, attended a planning meeting with a number of insurance industry chief executive officers which emphasised the importance of the industry in building natural disaster resilience and helping meet the UN’s sustainable development goals.

Through coordination of insurance-related activities, the Insurance Development Forum will take action to help close the so-called protection gap in the developing world.

Joaquim Levey, managing director and World Bank Group chief financial officer, is a co-chair of the forum, and said: “We, at the World Bank Group, are focused on eradicating extreme poverty and boosting shared prosperity. With only about 17 per cent of people in low and middle income countries with financial savings and insurance, compared to 45 per cent in high income countries, it is the most vulnerable in our society who will benefit most from being insured.”

Helen Clark, administrator of the United Nations Development Programme and former prime minister of New Zealand, is also a co-chair of the forum.

The forum’s seven working groups have been given specific project goals and will report to the high level steering group in September, in the margins of the UN General Assembly.