Increasing insurability to close protection gaps

The paper aims to aid understanding of barriers to insurability and what it takes to make a risk insurable. It calls for urgent, coordinated action across governments, regulators, insurers, and development partners to increase insurability and accelerate resilience-building. It provides a practical roadmap with over 50 actionable recommendations for multiple stakeholders to make risks once considered “uninsurable” insurable and enhance national resilience.

Key recommendations of this paper, include:

• Invest in risk reduction to enhance affordability: Governments should adopt building codes that enhance NatCat resilience, restrict development in hazard prone areas, invest in open hazard data weather networks, and resilient infrastructure – recognising that reducing risk lowers the cost of insurance.
• Promote open data and risk literacy: Public investment in hazard and exposure data, paired with targeted education, can build trust and informed demand.
• Strengthen public-private partnerships: Use pooled risk mechanisms, catastrophe backstops, and concessional finance to make insurance available and affordable in vulnerable markets.
• Embed insurability as a policy and regulatory objective: Regulators and policymakers should explicitly prioritise insurability, insurance market development, and proportional, innovation-friendly regulation.
• Enhance risk and insurance literacy.
• Tailor new products to local needs. Address human behavioural barriers to risk mitigation and the purchase of insurance protection:.