Lloyd’s of London, the 327-years old insurance market, has launched an initiative to help developing economies improve their resilience against the economic impact of natural catastrophes.
Eight Lloyd’s syndicates are joining forces to offer specialist underwriting expertise and new insurance capacity to help developing economies tackle underinsurance, which can mean that losses resulting from disasters ranging from earthquake to hurricane are not covered.
Lloyd’s said that emerging economies across Latin America, Africa, and Asia currently contribute 40% to global gross domestic product (GDP), yet represent only 16% of global insurance premiums. When a natural catastrophe occurs, this level of underinsurance can damage growth and hamper economic development.
The eight Lloyd’s syndicates are providing capacity of US$400m towards solutions that address natural catastrophe risks in emerging and developing economies. Key to its effective deployment will be well-designed risk sharing initiatives and the diversification of risk.
The initial group of Lloyd’s syndicates participating in the initiative are managed by Amlin, Beazley, Hiscox, Mitsui Sumitomo Insurance Group, Nephila, RenaissanceRe Syndicate Management, Tokio Marine Kiln and XL Catlin. However, membership is open to the entire Lloyd’s market and other managing agencies are being invited to participate.
The group has extended the invitation to international organisations including – but not limited to – the World Bank and the UK government’s Department for International Development. It also aims to strengthen existing ties with several current global initiatives, such as the Insurance Development Forum created by the International Insurance Society and to engage with governments, municipalities, and non-governmental organisations.
“This collective initiative means the Lloyd’s market can help provide the insurance solutions needed to build resilience to natural hazards and promote risk awareness around the world,” said Tom Bolt, director of performance management at Lloyd’s. “We are keen to work closely with organisations across the globe to help protect economic growth in developing countries.”
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