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Average annual global losses, threat to lives and livelihoods from natural disasters pegged at US$190 billion: U.N. conference

March 16, 2015   by Canadian Underwriter

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Average annual economic losses and average annual insured losses of approximately US$190 billion and US$60 billion, respectively, from natural disasters in the past decade clearly demonstrate that governments must step up global efforts to build resilience.

Average annual global insured losses estimated at US$60 billionThe caution was part of the United for Disaster Resilience Statement issued Saturday by insurance companies – members of the UNEP FI Principles for Sustainable Insurance (PSI) – during the opening of the 3rd UN World Conference on Disaster Risk Reduction in Japan.

The largest collaborative initiative between the United Nations and the insurance industry, PSI is backed by insurers representing about 15% of the world’s premium volume and US$9 trillion in assets under their management.

The resilience statement underscores the value of disaster risk reduction, especially in the context of climate change adaptation, and the need for climate change mitigation, notes a UN press release. “This century, more than one million people have already lost their lives to disasters,” adds the resilience statement.

“Disasters undermine hard-earned development gains and perpetuate poverty. Building resilience against natural disasters, exacerbated by climate change, is a global priority that calls for decisive and urgent action by multiple actors at all levels,” Achim Steiner (pictured below right), UN Under-Secretary-General and Executive Director of the UN Environment Programme (UNEP), says in the UN press release.

Achim Steiner, UN Under-Secretary-General and Executive Director of the UN Environment Programme“Building disaster-resilient communities and economies for the future will require an ‘all-hands-on-deck’ approach. Public-private collaboration is key to the success of such efforts,” Steiner emphasizes.

“The vision outlined by the insurance industry in shaping a resilient and sustainable future should inspire other industries to do the same,” suggests Margareta Wahlström (pictured below), UNISDR head and the Special Representative of the UN Secretary-General for Disaster Risk Reduction. “The strong engagement of the private sector is crucial to reducing disaster risk and avoiding the creation of new risks,” Wahlström says.

Margareta Wahlström, UNISDR head and the Special Representative of the UN Secretary-General for Disaster Risk ReductionThe resilience statement notes a new global framework will be adopted at the conference to help governments at all levels better prepare for disaster risk and to improve the resilience of nations and communities to disasters. For the first time, the framework includes a role for the private sector to contribute to disaster resilience, in line with the “five private sector visions.”These sector visions are as follows:

• strong public-private partnerships drive disaster risk reduction and resilience at the local and national levels;

• resilience in the built environment is driven by the public sector setting adequate minimum standards, and the private sector voluntarily working towards optimal resilience;

• all financial investment and accounting decisions, public and private, are risk-sensitive;

• a resilience-sensitive public and resilience-sensitive businesses drive each other towards resilient societies; and

• the identification, disclosure and proactive management of risks carried by companies and public sector entities is standard practice.

The resilience statement further urges governments to adopt the UN Post-2015 Framework on Disaster Risk Reduction. Individual insurance organizations can help with implementation of the framework by making voluntary, specific, measurable and time-bound commitments, it notes.

“Recognizing the unique roles of the insurance industry as risk managers, risk carriers and institutional investors is key to harnessing its full potential in disaster risk management, and in supporting the transition to a sustainable economy,” Michael Morrissey, President and CEO of the International Insurance Society, a signatory to the statement, says in the UN press release.

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