Following what the UN Office for Disaster Risk Reduction (UNISDR) has reported as “marathon 30-hour negotiations”, on 18 March 2015, a new global framework for disaster risk reduction has been adopted by 187 UN member states at the UN World Conference on Disaster Risk Reduction.

In the past decade, average economic losses from disasters totalled approximately US$190 billion per year, with average insured losses totalling approximately US$60 billion per year. More than one million people have lost their lives to disasters so far this century.

The new framework, which is to provide guidance on disaster risk reduction for the next 15 years, outlines seven global targets to be achieved within this period, as follows:

  • A substantial reduction in global disaster mortality.
  • A substantial reduction in numbers of affected people.
  • A reduction in economic losses in relation to global GDP.
  • Substantial reduction in disaster damage to critical infrastructure and disruption of basic services.
  • An increase in the number of countries with national and local disaster risk reduction strategies by 2020.
  • Enhanced international cooperation.
  • Increased access to multi-hazard early warning systems and disaster risk information and assessments.

For the first time, such a framework provides a role for the private sector to contribute to disaster resilience, and highlights that the insurance industry is well placed to understand the economic and social impact of disasters. In recognition of this, a statement in support of disaster risk reduction has been published by the United Nations Environment Programme Finance Initiative (UNEPFI), and has been signed by some of the largest insurance and reinsurance companies, including AXA and Swiss Re. The statement sets out the industry’s support for the new framework in line with the following “five private sector visions”:

  1. Strong public-private partnerships drive disaster risk reduction and resilience at the local and national levels.
  2. Resilience in the built environment is driven by the public sector setting adequate minimum standards, and the private sector voluntarily working towards optimal resilience.
  3. All financial investment and accounting decisions, public and private, are risk-sensitive.
  4. A resilience-sensitive public and resilience-sensitive businesses drive each other towards resilient societies.
  5. The identification, disclosure and proactive management of risks carried by companies and public sector entities are standard practice.

It is hoped that with the new framework, insights and data from the insurance industry will contribute to the reduction of disaster risk worldwide, protect investments and economies, and create long-term value and efficiency in order to reduce the financial impact of disasters on societies and their governments.

The full text of the framework can be downloaded from the UNISDR here:http://www.wcdrr.org/uploads/Sendai_Framework_for_Disaster_Risk_Reduction_2015-2030.pdf

The full statement from the insurance industry can be found on the UNEPFI website here:http://www.unepfi.org/psi/united-for-disaster-resilience/