Publication: G20 Sustainable Finance Working Group Input Paper: Identify and Address Insurance Protection Gaps
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2025-07-31
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2025-09-29
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In the face of growing challenges caused by natural catastrophes, insurance should be a key element of comprehensive disaster risk financing strategies. Increasing damage and economic losses from natural catastrophes (NatCat) are widening protection gaps and causing strain on economies and government budgets, with potential systemic ramifications. By promoting risk-based approaches, insurance solutions can contribute to risk reduction and strengthen societal resilience. In the face of growing challenges caused by natural catastrophes, insurance should be a key element of comprehensive disaster risk financing strategies. Globally, there are significant challenges to the insurability of NatCat events, many of which are more pronounced in EMDEs. Insurance-based solutions cannot address all NatCat risks on their own, nor is it desirable or cost effective for insurance to remove incentives to proactively plan for and manage disaster risk. This paper outlines a range of approaches that stakeholders can take to address NatCat insurance protection gaps. To support the practical application of the paper, this is supported by illustrative case studies, with a focus on EMDEs. It is important to note, however, that there is no one-size-fits-all solution to NatCat protection gaps, and jurisdictions will need to consider local circumstances when implementing any solution.
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“World Bank. 2025. G20 Sustainable Finance Working Group Input Paper: Identify and Address Insurance Protection Gaps. © World Bank. http://hdl.handle.net/10986/43778 License: CC BY-NC 3.0 IGO.”
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