Building Resilience with Insurance

In May 2024, the inaugural Global Sustainable Insurance Summit was held in Los Angeles, focusing on the critical role of insurance in building resilience against natural catastrophes. Hosted by California’s insurance commissioner, Ricardo Lara, and organized in collaboration with the UN Environment Programme Finance Initiative, the summit emphasized the increasing burden of insurance losses due to urbanization, inflation, and climate change.

A key takeaway from the summit was the need for a comprehensive approach to natural catastrophe risk, involving public-private partnerships, innovative insurance solutions, and proactive risk management. Traditional indemnity-based insurance was deemed insufficient for complex modern needs, leading to the promotion of parametric insurance. This type of insurance provides flexibility and broad coverage based on predefined triggers, exemplified by Swiss Re’s partnership with New York City for excess rainfall and storm surge events.

The summit also highlighted the importance of promoting insurance as a preventive tool. Swiss Re’s collaboration with the World Bank and Jamaica’s use of Cat Bonds were presented as successful examples of mitigating climate risks. These initiatives align with Swiss Re’s mission to enhance global resilience, showcasing the potential unlocked through effective partnerships between the insurance industry and public sector entities.