Reuters, Barcelona :
Disaster-prone developing nations, including Bangladesh and Indonesia, are exposed to crippling losses when storms, floods or earthquakes strike because they suffer from a dangerous lack of insurance, London-based insurance market Lloyd’s said in a report.
For poorer nations such as Bangladesh, buying insurance was a “low-order issue” compared to other economic problems, Lloyd’s Chairman Bruce Carnegie-Brown said in a statement.
He urged donor governments to work with financial markets to find ways to use aid money to boost protection, adding that current efforts are fragmented and not expanding fast enough.
“The developed world is not really assisting the countries least able to afford the resilience investment that we think they need,” he told the Thomson Reuters Foundation.
Bangladesh, India, Vietnam, the Philippines, Indonesia, Egypt and Nigeria all have an insurance penetration rate of less than 1 per cent, it said.
After a disaster, uninsured losses usually have to be paid from government funds – a problem for poorer countries that cannot afford to rebuild.
“Catastrophes coupled with underinsurance can be seen as one of the significant factors that holds back economic development and perpetuates global inequality,” the report said.
Globally, assets worth about $163 billion are not insured against catastrophes, posing a “significant threat” to livelihoods and prosperity, the report said.
The value of “underinsured” assets has shrunk by only 3 percent since 2012, it noted.
Many countries with the lowest levels of insurance are also among those most exposed to risks, including from climate change impacts, and are least able to fund disaster recovery efforts, it added.
“If insurance is not available, catastrophes can have a much greater impact on economies and lives,” Bruce Carnegie-Brown said.
Emerging and low-income economies account for almost all of the global “insurance gap”, the report said.
Insurance penetration rates – total insurance premiums as a percentage of gross domestic product – are on average twice as high in rich nations as those in developing countries, it noted.
Some risks in richer nations also are not well-covered by insurance, it noted, including earthquakes in Italy and floods in the United States.
Slow progress on expanding the use of insurance to protect against risks is “concerning”, the report said – and remains the case despite many economies bouncing back from recession in the six years since the “insurance gap” was last measured.
Disaster-prone developing nations, including Bangladesh and Indonesia, are exposed to crippling losses when storms, floods or earthquakes strike because they suffer from a dangerous lack of insurance, London-based insurance market Lloyd’s said in a report.
For poorer nations such as Bangladesh, buying insurance was a “low-order issue” compared to other economic problems, Lloyd’s Chairman Bruce Carnegie-Brown said in a statement.
He urged donor governments to work with financial markets to find ways to use aid money to boost protection, adding that current efforts are fragmented and not expanding fast enough.
“The developed world is not really assisting the countries least able to afford the resilience investment that we think they need,” he told the Thomson Reuters Foundation.
Bangladesh, India, Vietnam, the Philippines, Indonesia, Egypt and Nigeria all have an insurance penetration rate of less than 1 per cent, it said.
After a disaster, uninsured losses usually have to be paid from government funds – a problem for poorer countries that cannot afford to rebuild.
“Catastrophes coupled with underinsurance can be seen as one of the significant factors that holds back economic development and perpetuates global inequality,” the report said.
Globally, assets worth about $163 billion are not insured against catastrophes, posing a “significant threat” to livelihoods and prosperity, the report said.
The value of “underinsured” assets has shrunk by only 3 percent since 2012, it noted.
Many countries with the lowest levels of insurance are also among those most exposed to risks, including from climate change impacts, and are least able to fund disaster recovery efforts, it added.
“If insurance is not available, catastrophes can have a much greater impact on economies and lives,” Bruce Carnegie-Brown said.
Emerging and low-income economies account for almost all of the global “insurance gap”, the report said.
Insurance penetration rates – total insurance premiums as a percentage of gross domestic product – are on average twice as high in rich nations as those in developing countries, it noted.
Some risks in richer nations also are not well-covered by insurance, it noted, including earthquakes in Italy and floods in the United States.
Slow progress on expanding the use of insurance to protect against risks is “concerning”, the report said – and remains the case despite many economies bouncing back from recession in the six years since the “insurance gap” was last measured.
