GFIA supports OECD work on financial resilience to disasters

22 May 2023

Responding to the draft OECD Recommendation on Building Financial Resilience to Disaster Risks, GFIA has welcomed the OECD’s Recommendation as one that is well conceived and focuses on financial resilience to aid recovery.

The Global Federation of Insurance Associations (GFIA) thanks you for the opportunity to comment on the draft OECD Recommendation on Building Financial Resilience to Disaster Risks. GFIA finds the Recommendation to be well conceived and supports it. GFIA has certain specific comments and clarification suggestions which are set out below.
GFIA is generally in agreement with the proactive risk management and financially sound Recommendation. The Recommendation aligns well with and supplements the suggestions in the March 2023 GFIA report entitled “Global protection gaps and recommendations for bridging them”. The scope of the GFIA report was not focused on risk management recommendations for national and local governments, accordingly GFIA welcomes the focus of the OECD Recommendation on these important issues.
While the GFIA report covers natural catastrophes and other protection gaps, its natural catastrophe recommendations generally address:
■ the continuing need to educate the public on risk and the benefits of insurance;
■ new distribution methods for the delivery of insurance products, particularly in developing regions;
■ the need for government and individual actions to increase physical structural resiliency and to adapt to existing and anticipated natural catastrophe risks;
■ risk transfer into the global insurance and reinsurance markets to reduce catastrophic risk concentration, increase diversification and increase the financial resiliency of the insurance risk market; and,
■ the need to promote cooperation between the public and private sectors to close protections gaps, including — where deemed appropriate by a given jurisdiction — private insurance and reinsurance market involvement supplemented with government-backed, public-private partnerships or similar funds.
The report also emphasises the continuing need for risk adequacy in the rates charged for the risk ultimately transferred to insurers...

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