Sharing risk knowledge a key to sustainable insurance: UN report

Sharing risk knowledge, forming public-private partnerships, using information technology and partnering for distribution and consumer education are all means insurers can use to implement a campaign of proactive engagement in sustainable insurance, according to a report released by the Insurance Working Group of the United Nations Environment Programme Finance Initiative. A robust insurance industry provides the thorough risk analysis and early-warning system that allow informed choices to be made, businesses to prosper and sustainable livelihoods to be built and flourish, Paul Clements-Hunt, head of the United Nations Environment Programme Finance Initiative wrote in the foreword of the report. It is in insurers interests to reduce risks and improve sustainability, the report notes. Firstly, it will improve the probability that the funds collected will be adequate to meet all the claims. Secondly, in a sustainable society, risks are more likely to be insurable and economic growth will be more stable, entailing that insurance markets will thrive.The report says three areas require greater attention: (1) offering micro-insurance linked to microfinance, (2) determining upcoming risks and sharing this information with the public and (3) creating products and services for natural resources. The report also outlines obstacles to sustainable insurancestructural barriers that affect the whole financial sector and barriers to insurability, the report says. The main structural barriers include misperception, institutional rigidity, insufficient capacity and vulnerability.