Willis Research Network says insurers’ models cut impact
Willis Research Network chairman Rowan Douglas told the World Bank that governments and aid agencies could use insurers’ scientific risk models to tackle sustainable development and alleviate poverty.
He told World Bank's inaugural Understanding Risk conference, that the methods insurers use to model extreme risks could be the key to communities cope with the social and economic impacts of floods, droughts and other climate-related threats.
“We tend to manage for normality, but it is the extreme events that often matter most," said Mr. Douglas. "Whether it's in our financial institutions, societies or environment, sustainability is achieved by avoiding or managing the impacts of undesirable extremes within tolerable parameters.
“Therefore, we are proposing a new lens through which we look at the issue of sustainability, one which repositions the fundamental concepts and roles of insurance at the heart of delivering sustainability, financial security and poverty reduction."
Poorest worst affected
According to the World Bank's research, it is the poorest of the poor in regions such as Southeast Asia who will be most affected by extreme weather events, including floods, cyclones and drought.
India alone could see a 30-40% decline in agriculture productivity as a direct result of more extreme weather.
"Perhaps we should reshape strategies to alleviate poverty by either reducing exposure to extremes or increasing resilience. It's a subtle change in philosophy, but it raises fascinating questions about how we spend our aid budgets or focus other interventions," Douglas said.
