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Development Finance Forum 2016

The Development Finance Forum is KfW Development Bank's most important specialist event. Held annually, it focuses on a current development issue. This year's event covered insurance and its increasingly vital role in these times of climate change and larger pandemics. While insurance cannot avert climate change or illnesses, it can ease the horrors of catastrophes. It does this by preparing for the worst-case scenario in an effort to avoid the hectic responses that usually ensue after a tornado or a drought or other disaster. Risks are attenuated by spreading them across many shoulders and by timely actions so that development progress can be ensured. Throughout the world, the international community is working to develop insurance solutions, in some of which KfW is also involved. KfW Development Bank sees insurance as a means of complementing its typical tools, such as grants and loans, to make a contribution towards achieving the Sustainable Development Goals (SDGs). At this year's Development Finance Forum titled "Insuring the SDGs", which took place on 2. and 3. November, experts from around the globe were looking for ways to involve insurance to an even greater extent in development cooperation.

Testimonials

Joseph Philip Parungao

Senior Vice President, Bank of the Philippine Islands

"Working on the fundamental concept of managing a pooled risk, insurance has the power of becoming a collective response to avert the social and economic disasters that come after natural calamities. This requires leadership, foresight, and a collective desire to achieve the common good."

Esther Baur
Esther Baur

Director, Swiss Re

"Insurance is an important instrument for an integrated risk management and an adequate response to natural disasters. It should therefore be used more frequently by the international community – also with regard to achieving of the SDGs."

Heiko Warnken
Heiko Warnken

Division Chief Health and Social Protection, BMZ

"The SDGs offer a great opportunity for getting adequately prepared to meet the challenges of the future. The global community is facing increasing threats from natural disasters and outbreaks of disease. Insurance is a promising instrument to react quickly and thoroughly in the event of a crisis."

Yates
Robert Yates

Project Director UHC Policy Forum, Chatham House

"All countries are now committed to achieve universal health coverage (UHC) whereby everybody receives the quality health services they need without suffering financial hardship. A free market in healthcare will not deliver this goal though and so governments are designing public financing systems that force healthy and wealthy members of society to subsidise services for the sick and poor."

Dolika Banda
Dolika Banda

CEO, African Risk Capacity Limited (ARC Ltd.)

"In a world where climate-related disruptions can devastate whole communities in an instant, insurance can play a critical role in terms of transferring risk from the vulnerable and assuring timely and pragmatic reconstitution of livelihoods when disaster strikes. By its very symbiotic nature, insurance promotes mutually beneficial relationships between the insured, the insurer and the re-insurer. "

Michael McCord
Michael McCord

President, Microinsurance Centre

"Microinsurance is a key to sustainable development. Indeed, without SUAVE - simple, understood, accessible, valuable, and efficient - microinsurance, there cannot be true sustainable development. Without these risk management products that provide a fair profit to insurers and value to households, families will simply continue to improve and then fall back into poverty when they are hit with another risk."

Raymond Offenheiser

President, Oxfam America

"Insurance is, without a doubt, an essential tool for achieving the Sustainable Development Goals. Integrated with other risk management options, it can help the most vulnerable populations manage unforeseen health threats and respond to the spreading impacts of climate change."

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Manuela De Allegri

Researcher, University of Heidelberg

"Insurance contributes to poverty reduction by limiting financial exposure to risk, such as the risks associated with falling ill or with bad harvests due to drought. The international community needs to think of innovative insurance models to complement, not to replace, existing social protection systems in low and middle Income countries."

Joseph Kutzin

Coordinator for Health Financing Policy, WHO

"Financial risk protection against the costs of health care can take many forms, but what successful approaches have in common are a predominant reliance on public funding, either from general tax revenues, mandatory contributions, or a combination. In the quest for Universal Health Coverage, it is of paramount importance to identify country-specific solutions with equity at the core."

Mitigating Existential Risks

With the adoption of the seventeen Sustainable Development Goals (SDG) for tackling the most urgent problems facing humanity, the international community set itself an ambitious agenda for the years to come. According to various calculations, it will take some three to five billion US dollars to reach these goals. It is already clear that the amount of funding committed is not sufficient, nor will it be possible to raise enough additional Official Development Assistance (ODA). Consequently, the "Addis Ababa Action Agenda" for development financing, also adopted by the international community in 2015, expressly states that private funding and innovative financial instruments will also be needed to achieve the SDGs.

Insurance is one of these innovative financial instruments. It can buffer the risks that threaten the success of the SDGs - such as illness, poverty amongst the elderly, harvests failures or pandemics - and in this way bolster resilience particularly of the poor and vulnerable against misfortunes and natural disasters. Insurance can directly support affected households by providing them with cash during and after a natural disaster or by providing suitable healthcare services in times of illness. Furthermore, insurance can indirectly support affected households via intermediaries, e.g. microfinance institutions that insure their loan portfolio against severe weather events or countries that use insurance to finance emergency plans in the case of pandemics such as Ebola. KfW also uses insurance as an innovative financial tool for development financing. The Development Bank has particular experience in climate risk insurance and in the health sector. From a global perspective, there is still much that needs to be done to equip the poor and vulnerable with adequate insurance solutions necessary to achieving the SDGs.

Onepager - Prepared for the Expected:Insurance in Disaster Risk Management  (PDF, 74 KB, non-accessible)

Graphic about direct insurances
Graphic about indirect insurance access

Contact

KfW Development Bank

Phone

+49 69 74 31-42 60

eMail

info@kfw-entwicklungsbank.de
Development Finance Forum 2016

Play video (3:47 min.)

Insurance - Preventing Development Setbacks

Interview with Dr Norbert Kloppenburg, Member of the Executive Board of KfW.

Play video (1:37 min.)

Insuring the SDGs - Managing Climate and Life Risks

Final documentation of the Forum

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"Insurance has great potential for the future"

Ingrid-Gabriela Hoven, Director-General at the Federal Ministry for Economic Cooperation and Development, about the benefit of insurance in development cooperation

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Fotostory on the subject of insurance

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Development Finance Forum 2016 - Agenda

Read more  (PDF, 241 KB, non-accessible)

Development Finance Forum 2015

Read more about the Development Finance Forum 2015 on the topic of Nutrition Security.

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