Innovative risk solutions key for climate-resilient economy transition - MMC
Insurance and other risk transfer and financing mechanisms will become increasingly important in managing catastrophic risk as countries transition to more climate-resilient economies as Egypt considers a new NatCat pool, according to experts.
At the “Adapting to a changing climate in the management of catastrophic risks in Egypt” conference on November 3 – hosted by the Insurance Federation of Egypt (IFE), in conjunction with reinsurer Guy Carpenter, and insurance broker Marsh, both businesses of Marsh McLennan – public and private sector leaders discussed the near and longer-term repercussions of climate change in Egypt.
Additionally, experts also discussed how advances in risk mitigation, management, adaptation, and risk transfer are needed to address climate-related catastrophic risks.
This is relevant for Egypt as the region is highly vulnerable to a number of perils, including water scarcity, droughts, rising sea levels, and other climate-related impacts, which are all expected to increase.
According to the Global Facility for Disaster Reduction and Recovery (GFDRR), natural hazards have killed nearly 1,500 people in Egypt over the last 20 years and caused estimated economic damages of $347 million.
Commenting on the role of re/insurance in efforts to develop a more climate-resilient economy in Egypt, Alaa El-Zoheiry, Chairman, IFE, said: “Addressing climate change is a pivotal part of the IFE strategy; consequentially IFE has taken steps towards dealing with climatic risks by establishing technical committees for sustainable insurance and agricultural insurance, and conducted several events and workshops to discuss such risks.
“In addition, IFE is working strategically and closely with large reinsurers and reinsurance brokers to identify the best insurance solutions for climatic risks, including but not limited to, establishing a NatCat pool. This conference, in partnership with Guy Carpenter and Marsh, aims at sharing global experience with the Egyptian market on such a crucial topic.”
Guy Carpenter has facilitated the development of numerous public/private partnerships to address catastrophic risk. Ruth Lux, Head of Public Sector, UK, Europe, Middle East & Africa at Guy Carpenter highlighted that the global insurance sector can impact global resilience through effective financial investments and community-level interventions on-the-ground.
Atish Suri, CEO, Middle East & Africa, Guy Carpenter, commented: “For effective risk management, multifaceted strategies are often required to improve a community’s ability to rebound from calamitous events, whether from droughts, wildfires, floods, or other catastrophic occurrences.
“Disaster resilience relies on four pillars – preparedness, mitigation, adaptation, and risk transfer – that must be blended more effectively to manage the challenges society faces from issues brought on by climate change. This is precisely what Guy Carpenter and Marsh are focusing on.”
Providing further insight on transitioning to a more climate-resilient economy, Christos Adamantiadis, CEO Middle East & Africa, Marsh, said: “The ability to anticipate, measure, and manage risks will be a critical advantage to organisations as the transition unfolds. Businesses need to build resilience throughout the transition, analysing the evolving risk environment, preparing for what may happen, and insuring against new types of risk.”
Source: Reinsurance News, https://www.reinsurancene.ws/innovative-risks-solutions-key-for-climate-resilient-economy-transition-say-experts/