Closing the protection gap – the Insurance Development Forum’s Ekhosuehi Iyahen
Ekhosuehi Iyahen, secretary general of the Insurance Development Forum (IDF), was the latest guest to be interviewed on Mark Geoghegan’s Voice of Insurance podcast.
Commercial insurance tends to do what it says on the tin – it’s a business like any other in the sense that exists to make a profit. That said, ours is a sector based around the concept of trust, with a proud long and social history, and a societally useful role underwriting economic development.
As Mark noted, his latest guest, Ekhosuehi Iyahen, secretary general at the Insurance Development Forum (IDF), is living proof that insurance can play a “socially useful” role – to coin a phrase used to criticise banking during the financial crisis. That’s because her job is to harness the purpose of insurance for disaster risk financing in countries that can most benefit from it, first for the Caribbean Catastrophe Risk Insurance Facility, before joining the IDF.
“Not many people understand the way insurance is able to blend these disciplines,” said Iyahen. “For me, it’s been fascinating, as a space where I can interact with lawyers, geographers, geologists, engineers, finance people – all in a single day. We don’t often speak about the value of that multidisciplinary nature of the insurance industry and ecosystem.”
A public-private partnership, the IDF is led by the industry but co-chaired by NGOs such as the World Bank and UN. It’s on a mission to optimise and extend the use of insurance and its related risk management capabilities to build greater resilience and protection for people, communities, businesses, and public institutions vulnerable to disasters and associated economic shocks.
“This is an important mission, especially when you look at the news, what’s happening in Libya, Morocco, wildfires, everything around the world. It’s about helping those communities and governments struggling with these kinds of shocks to understand the risks that they are faced with, and what they can do to create more resilient societies,” Iahen said.
“That’s at the heart of the work that we do at the IDF. We focus on emerging markets and developing countries. It’s about bringing those capabilities that we think are relevant from the insurance industry towards what is a big challenge at the moment,” she added.
The focus of the IDF’s secretariat is on implementation, she stressed, mobilising the industry to do what’s necessary to close the protection gap between economic and insured losses, which is highest in developing countries, and in turn stymies or slows their development.
Advocacy remains necessary because the public sector and other industries still lack awareness of the role of insurance in resilience building and socioeconomic development.
“But I think from our perspective, it’s probably more important to actually do,” she said.
Iyahen went on to emphasise the need not just to involve those at the very top of the industry, but brokers, agents and underwriters in the emerging markets they are trying to reach to drive change.
“It’s about people who are working, for example, in offices in Thailand, or in companies in Senegal, to understand the broader topics and how I can contribute, and how this converges with what I’m trying to do in those countries,” she continued.
In practice, this firstly involves improving the availability of risk information to drive awareness, as well as strengthening capabilities open to emerging market risk professionals, by making tools available for them to take important risk-based decisions.
This was a focus at the Glasgow COP26 Summit in 2021 for the ‘V20’ group of countries most vulnerable to climate change. The IDF constructed a channel to respond to this demand, which was backed with resources from the German government.
“It’s a bit of a misnomer, because it was actually 58 of the most vulnerable countries. It was a reaction to their expression of this need for support in deepening risk capabilities and the availability of tools.
Insurance can be a world-leader in building sustainability and resilience goals in relation to climate risk, Iyahen emphasised.
“There is no better sector [than insurance] that should be supported in trying to advance this, even if it’s from a self-interested perspective, in terms of how that feeds into product development,” she added.