Letters from Sendai – n°3
Let’s do it together – but how? Multi-sectoral partnerships – the case of insurance
A surprisingly high number of private sector representatives are here in Sendai – most visibly the Japanese businesses showcasing their approaches to disaster preparedness. Delegates can experience Earthquake staff drills staff, see solar powered emergency response kits in action or witness latest advancements in remote sensing developed by technology companies. Some global companies are represented through the UNISDR’s Private Sector Advisory Group, whose member companies have all agreed to involve their peers and customers in the debate about resilience. ENHANCE partner Willis is very visible, engaged at several levels, hosting forums and driving discussions about the role of the wider financial system in the context of disaster and
Does this mean that the quest for better engagement of the private sector within the disaster and climate risk discourse is progressing well?
Certainly there appears to be some momentum in this area, as more and more companies wake up to the business opportunities within the disaster and climate risk field. However, far too often the discourse between public and private sector stakeholders seem to get stuck once the first step of engaging, debating and exploring solutions is made. There may be a shared vision, but roles and responsibilities are far from clear, and (mis-)perceptions can hamper practical action. That is of course not always the case – some successful collaboration occurs for example in the context of remote sensing or risk modelling. Nevertheless, far too often the hope of ‘doing it together’ is frustrated because we lack the needed clarity on steps, process and mutual expectations. ENHANCE partner Jaroslav Mysiak (FEEM) alerted to this in his talk during the Public Forum session on ‘ Flooding in Europe – new risks and strategies to build resilience’, organized by the German catastrophe prevention platform DKKV and ENHANCE partner Annegret Thieken (Potsdam University): he noted that the references to ‘partnership’ permeate the discourse on the post-2015 development, climate and disaster risk reduction agenda, but what this means in terms of legal obligations, governance implications and practical considerations for the partners remains often unclear. (Link to the event and presentation?)
These are topics at the heart of the ENHANCE project: developing and analysing new ways to enhance society’s resilience to catastrophic natural hazard impacts, by contributing to the development of new multi-sector partnerships (MSPs) to reduce or redistribute risk.
Even the Special Representative of the UN Secretary –General for Disaster Risk Reduction, Margareta Wahlstroem admitted in a speech today that she still feels unsure how to conduct effective‘ multi-stakeholder dialogue and engagement’. Her remarks came at an event organized by the insurance industry, the Genevea Association’s Public Forum on “Insurance as contributors to problem solving and impact reduction” held here in Sendai.
The insurance industry is often referred to when calls for private sector engagement on risk issues are made. This is not surprising, as the industry has a long track record, particularly in the context of risk assessment and data gathering, working for many years with and across different stakeholders. However, as highlighted by ENHANCE partner Swenja Surminski during her talk at this event, expectations of what insurance can deliver and perceptions on roles and responsibilities differ hugely across stakeholders. There are no simple answers or template solutions – purely private sector schemes exist alongside public schemes, underwritten by the government. And as ENHANCE researchers recently established, there is no appetite to harmonize the existing variety of insurance approaches across Europe. (Surminski et.al : Reflection on the current debate on how to link flood insurance and disaster risk reduction in the European Union, ENHANCE working paper, 2015).
Insurance is not always the most appropriate tool. As pointed out by Swenja in her talk, clarity about what it does and in which context it might work is often still lagging. One mechanism that can assist with this evaluation is risk layering, which, if correctly applied, allows decision makers to gain a better understanding of the types of tools and instruments suited for certain risk levels. Judging from some discussions here in Sendai this approach does not seem to receive adequate attention across the disaster and climate risk community. A recent Nature Climate Change commentary by several ENHANCE partners (Mechler et.al: Managing unnatural disaster risk from climate extreme, Nature Climate Change, 2014) points towards the use of risk layering as an important mechanism to gain a better understanding of the types of tools and instruments suited for managing certain risk levels.
Reflecting on today’s discussions there seems a clear recognition that risk transfer is not the only tool that the industry can bring to the table. Most of the non-insurance participants in the Geneva Association Forum discussion identified data sharing and risk knowledge transfer as their key priorities when engaging the insurance industry. To some extent this is understandable, as access and quality of data are still posing key challenges in many parts of the world. However, as explained in Letter from Sendai No 2 it is also important to consider what the data and risk knowledge can do in terms of assisting decision makers, and if it is actually used. The use of risk information can sometimes trigger uncomfortable discussions: all the hope for ‘doing if together’ might disappear when partners start worrying about ‘unwanted’ consequences of better risk information – for governments and home owners this can be rising insurance premiums, while the industry may be concerned about increasing regulatory solvency requirements. These aspects are at the heart of the debate about flood insurance in many parts of the world and have also found there way into the discussions here at Sendai – as we will explain in another Letter from Sendai…
From UN World Conference on Disaster Risk Reduction
Swenja Surminski, Grantham Research Institute, London School of Economics
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Official UN WCDRR website http://www.wcdrr.org/home
GAR2015 (Global Assessment Report 2015)