From protection to prevention: The role of cooperative and mutual insurance in disaster risk reduction

In this first-of-its-kind joint report, From protection to prevention: The role of cooperative and mutual insurance in disaster risk reduction, the International Cooperative and Mutual Insurance Federation (ICMIF) and the United Nations Office for Disaster Risk Reduction (UNDRR) identify seven practical mechanisms for how the cooperative and mutual insurance sector can help drive prevention and disaster risk reduction.

Based on an analysis of twenty case studies from ICMIF members around the world, the mechanisms provide a practical way for the cooperative and mutual insurance sector to implement the Sendai Framework for Disaster Risk Reduction, the global plan to reduce disaster losses adopted by UN Member States.

Speaking about the report and the partnership between ICMIF and UNDRR, Hilde Vernaillen, Chair of ICMIF and Chair of the Management Committee, P&V (Belgium) said: “ICMIF’s partnership with UNDRR seeks to freely share the work that our members are doing to prevent risk in a bid to inspire other insurers to follow their example. By reflecting on these 20 case studies, ICMIF and UNDRR have collaborated to synthesise this intelligence and create a best practice framework that any insurer could adopt.

“It is my sincere wish that our ambitions to encourage more widespread risk prevention are realised, for the sake of humanity and this incredible world that we inhabit. As we turn our attentions to the 26th UN Climate Change Conference of the Parties (COP26) scheduled to take place later this year in Glasgow (UK), I for one will be asking myself, how as a leader of an insurance company, can I do more to prevent hardship, pain and even death in the communities that I serve,” she concluded.

Mami Mizutori, Special Representative of the Secretary-General for Disaster Risk Reduction said: “I have been so encouraged to witness the commitment and action of ICMIF members to shift the focus of such a substantive and catalytic industry from protection to prevention.”

Mizutori added that “Swiss Re Institute estimates USD 83 billion global insured catastrophe losses in 2020, the fifth costliest on record, combined with a looming global debt crisis which will – as usual - hit the most vulnerable countries, communities and people the hardest. The message could not be clearer: Our understanding of and approach to risk not only needs to be fundamentally re-examined, but the interconnectedness and cascading dimension of risk must inform policies, practices and investments.”

Mizutori concluded: “The insurance industry, and particular the cooperative and mutual sector with its focus on resilience, innovation and community engagement, is uniquely placed to inform and lead such work. ICMIF has a long tradition of supporting countries to enhance national and local disaster risk reduction action; its engagement in the negotiations towards the Sendai Framework for Disaster Risk Reduction led to the inclusion of clear references to the need for private and financial sector and the regulators in driving and implementing disaster risk reduction.

ICMIF’s partnership with UNDRR

In November 2019, the International Cooperative and Mutual Insurance Federation (ICMIF) and the United Nations Office for Disaster Risk Reduction (UNDRR) began a multi-year collaboration to help address the urgent challenge of reducing disaster risks.

Specifically, the collaboration aims to identify what is needed in practical terms to enable a shift within the insurance industry from a focus on providing risk transfer products and services as a means to protect the insured from disaster risks, to an emphasis on prevention through disaster risk reduction incentives, awareness, capacity and financing. With a member-driven operating model, the cooperative and mutual insurance sector is uniquely positioned to take a lead in charting a practical path from risk protection to prevention.

While this report was prepared in the context of the cooperative and mutual insurance sector, it is meant as a source of inspiration for the insurance industry at large, showing that regardless of size, jurisdiction, market, strategic/operational focus, there are possibilities to prevent and reduce disaster risks.

Webinar

On Friday 30 April 2021, ICMIF hosted a webinar as the formal launch event for the report. The webinar also showcased the first pilot projects from ICMIF member insurers working in collaboration with UNDRR to put the seven practical mechanisms into practice.

Webinar speakers included:

  • Mami Mizutori, Special Representative of the Secretary-General for Disaster Risk Reduction, United Nations Office for Disaster Risk Reduction (UNDRR)
  • Irina Zodrow, Head, Partnerships and Stakeholder Engagement Unit, UNDRR
  • Ann Sommer, Senior Advisor and Former CEO, Länsförsäkringar Sak (Sweden)
  • Hilde Vernaillen, Chair of the Management Committee, P&V (Belgium) and Chair of ICMIF
  • Rob Wesseling, President and CEO, The Co-operators (Canada)
  • Moderated by: Shaun Tarbuck, Chief Executive, The International Cooperative and Mutual Insurance Federation (ICMIF)

Shaun Tarbuck:

Welcome to all of you to this unique webinar on the role of cooperative and mutual insurance in disaster risk reduction, as we move from protection to prevention. This webinar reflects the launch of a new report issued today and you can see that report if you want to download it in the handouts on the bar at the side. We have over 400 delegates registered for this webinar, which is fantastic.

We have a wonderful packed group of panelists here, all of which were at the launch of the collaboration agreement between the UNDRR and ICMIF at our conference in 2019 when we could actually meet face-to-face. This is certainly one of the key moments in time of that particular project as we launched this report of case studies from the cooperatives and mutual insurers around the world. What we are doing and how we are planning to go forward in delivering the move from protection to prevention.

Panelists, as you see there, I will introduce them very briefly to all of you. We are honored to have Mami Mizutori, Special Representative of the United Nations Secretary-General for Disaster Risk Reduction. We have also from the UNDRR,  Irina Zodrow, who's Head of Partnerships. Who's worked very closely with myself in terms of positioning the report. We have three of our board members, all CEOs of their own businesses as mutual and cooperative insurance. We have Hilde Vernaillen, who's CEO of P&V in Belgium and also the chair of ICMIF. We have Rob Wesseling, who's CEO of The Co-operators in Canada and also vice-chair of ICMIF. We have Ann Sommer, who's the former CEO of a Lansforsakringar Sak in Sweden. She's also a vice-chair of ICMIF. So a very distinguished panel as we go through the webinar.

So without further ado, I'll hand over to Mami Mizutori for the opening remarks on the webinar.

Mami Mizutori:

Thank you very much, Shaun. Good morning, good afternoon, and good evening to all participants. The United Nations Office for Disaster Risk Reduction appreciates ICMIF's hands-on approach and sense of urgency since we formalized our collaboration. A collaboration critical to explore and promote ways for your sector to move from a focus on a risk protection to risk prevention, and a critical cooperation for the implementation of the Sendai Framework for disaster risk reduction. The global blueprint for disaster risk reduction and resilience. Since we started to work together, the unprecedented but sadly, not unexpected arrival of COVID-19 has only accelerated the demand to change how we understand and address risk. While climate emergency is going nowhere, a rethink is needed because of the alarming trend of disaster-related losses. Outstripping our ability to respond, absorb, and survive.

Our understanding of an approach to risk needs to be fundamentally reexamined. The interconnectedness and cascading dimensions of risk must inform policies, practices, and investments. The Sendai Framework recognizes the role of the private and financial sector and their regulators in disaster risk reduction, highlighting the role of insurance. Through our collaboration not only has a shared understanding been achieved on how your sector, insurance sector can best support disaster risk reduction. We have also moved word into action with pilot initiatives already in development.

A report featured in today's webinar is launched during the first year of the UN Decade for Action with a number of critical meetings and decisions to be made. Including Cop 26 and the UNDRR-led regional platforms for disaster risk reduction. With focus on resilience, innovation in community engagement, the cooperative and mutual insurance sector has demonstrated that you are uniquely placed to inform and lead the shift from protection to prevention. I'm confident that today's event will guide us on how we can further our collaboration with ICMIF. Eventually, the whole insurance sector for a more resilient, greener, sustainable, and equitable world. Thank you.

Shaun Tarbuck:

Thank you for those kind words, Mami. Hilde, on behalf of ICMIF and as our chair.

Hilde Vernaillen:

Thank you, Shaun. So good morning or good afternoon, everybody. As chair of ICMIF, the International Federation of Cooperative and Mutual Insurance, I'm very pleased to welcome you all to this webinar on the role cooperative and mutual insurance can take in risk prevention. Preventing new risks and reducing existing risks is more urgent than ever. But it's not something that any one individual or even one organization as an insurer can hope to tackle in isolation. As we are facing one of the most existential crisis for centuries, it's really the time to develop meaningful partnerships and share knowledge generously for the ultimate survival of humanity. Working together for a better society, this is what ICMIF members do for almost one century. We do that through our global network. As values-led insurers, we are able to act for the long-term and we are trusted to do the right thing for customers and society. Cooperative and mutual insurers are again post and ready to lead from the front. This time with examples of the work that they have been doing in terms of disaster risk reduction and resilience. This is what the report is about.

At ICMIF's 2019 Biennual Conference in Auckland, we were very happy to start a new collaboration with three high-profile agencies, of which one was the United Nations Office for Disaster Risk Reduction. We were just before we started, talking to each other, remembering how good it was to be all together there at that conference. ICMIF's partnership with the UNDRR seeks to freely share the work that our members are doing, to prevent risks in a bit to inspire other insurers to follow their example. As Mami already said, this is something all insurers could use in their work. By reflecting on 20 case studies, ICMIF and UNDRR have collaborated to synthesize this intelligence and create a best practice framework that any insurer could adopt. Today, we are here together to present the results of a year of intensive work together. I'm sure you will have a very interesting afternoon listening to this wonderful examples. Over to you, Shaun.

Shaun Tarbuck:

Thank you, Hilde. Now, we understand that because the reports been released just today, you probably won't have much of a chance to look at it. So I'm going to turn to my colleague at the UNDRR, Irina Zodrow, to give you a flavor of what's in the report. Just run through some of the headlines before we get into some discussions. Irina, over to you.

Irina Zodrow:

Thank you, Shaun. Also, for me, good morning, good afternoon, good evening. So it's a real pleasure to be here today at this launch of this very interesting report. Before I look into the report, I just wanted to highlight as the head of the partnerships unit of UNDRR and responsible from our side for this work, that this is really the result of an excellent cooperation between the ICMIF family and the UNDRR. family. So I just wanted to say thank you to all the ICMIF members who have provided excellent case studies. Also, the six CEOs who already agreed to be on a high-level steering committee, which is fantastic. Then but also say thank you to the ICMIF Secretariat, obviously, Shaun Tarbuck. But then also Liz, Alison, Liam, Ben, and my colleagues Farah, Aaron, and Daniel, and our chief, Paula for the cooperation. I really look forward to continuing this.

Now, looking at the report, as Mami already mentioned, this is the result of a long-standing cooperation between ICMIF and UNDRR, which started already in 2014 before the adoption of the Sendai Framework. We formalized this in 2019 at the conference in November in Auckland. So the focus of this is the move from protection to prevention, with the final goal to develop a resilience framework for the mutual and cooperative sector. The corporation, obviously, has a key focus on the Sendai Framework, which the UNDRR is the custodian agency for. Hereby to prevent new reduce existing disaster risk and build resilience. But it should be also said that with this, it also supports the broader 2030 Agenda. Risk and resilience is really ingrained across all 2030 Agenda agreements, the SDGs, the Paris Agreement, the Financing for Development Agenda, the Urban Agenda. They together bring this very strong call to shift from a short-term and linear economy and thinking, towards long-term resilient, sustainable development. This we hope will be supported, respectively led by the mutual and cooperative sector in their actions.

Our collaboration is rolled out in three phases. The first phase is what we're presenting today, the results of which is the collection of case studies that prove the business case for this sector to invest and engage in disaster risk reduction and prevention. This will be followed by the rollout of series of pilot initiatives, which will put into practice what the record lines out. Then in the third phase, we're looking at operationalizing the mechanisms that we will look at in a second. Through setting and tracking goals, advanced business strategies, products or services that support DRR and prevention.

Here's the report. I'm really proud of it again, thank you for all the collaboration. It has three elements. The first is an analysis of the business case for DRR and risk-informed investment. The second is 20 case studies and I'll come to them in the next slide, which were provided by the ICMIF members. The third is seven mechanisms for DRR and resilience that can be implemented by the sector.

Now, here you see an overview of the members of ICMIF who provided case studies. It's been really a rich experience. I have to say, we try to structure the case studies in the report, according to the type of insurance measure. Whether they're focused on reducing hazards exposure or vulnerability, the three elements of risk or a mix of those. We also aligned them according to which of the sender hazards they addressed. The sender hazards just to remind everybody is natural and manmade hazards, including technological, environmental, and biological risks.

So the case studies were complemented by literature review. As a result of the two and that real in-depth and value of the information we got, we actually managed to already go a step further than originally anticipated. All the information together and analysis really showed a clear convergence on seven very practical, concrete, direct, and indirect mechanisms. Through which the cooperative and mutual insurance sector and potentially in the future also, the bigger insurance sector could support disaster reduction and resilience. So here's the three direct mechanisms, which are product-related. I know we're going to talk about those in more detail, so excuse me if I basically just go through them to highlight what they are.

First, applying variables pricing of insurance to provide incentives for risk reduction. Second, include prerequisites and exemptions to provide incentive for risk reductions. Insure the investment from the industry reduces and prevents risks and build resilience. The four indirect mechanisms which are related to their insurance as a provider of services include raising awareness of the systemic nature of risks. Provide transparent information and advice for reducing hazards exposure and vulnerability. To build and share capacity and technology for risk modeling, analysis, and monitoring. To promote and enhance local social capital for responding to disasters and innovating to reduce risks. Last but certainly not least, collaborate with the public sector to signal unsustainable development and support decision-making towards risk reduction and risk-informed investment, while closing the potential gap. So with this, thank you very much for your attention and back to you, Shaun.

Shaun Tarbuck:

Thank you, Irina, perfectly summarized as to what the report is about. So now we're going to turn to trying to bring some of those seven mechanisms to life. We've got our three ICMIF members there who are going to give us examples, most of which are actually not in the report. That just shows you the richness that we actually do have amongst the ICMIF members to touch on many of these seven different mechanisms in many different areas. So this is a starter to get you thinking. Then at the end of each one, I'm hoping Mami might have some thoughts that she might pass on to us for each of the seven mechanisms. So if any of these comments spark a question or anything like that in you, please do put it in the questions box. We'll try and get to those later on. So turning to the first one, I'm going to start with you, Hilde. So applying the variable pricing insurance to provide incentives for risk reduction. You want to give us an example from P&V?

Hilde Vernaillen:

Yes, I can. Well, using pricing is probably the most easy way to incentivize people when you're talking about insurance. It's something they need to have but it's not what they really want. They want to have a car and then they need an insurance and they have a house and they need an insurance. So pricing of insurance is an important one in incentivizing people. Few examples but there are even more, what we do is price reductions for electric cars, which is really an easy one. A little bit too early to say in terms of insurance, there is a lower risk in there. But it's, in any case, a way of helping people moving to electric cars. So it's still expensive cars now, so reducing the global cost is an important one. Another one is pricing reductions for energy sustainable homes when they use other types of materials, better isolation, and this kind of things. We also give price reductions. Just a few.

Shaun Tarbuck:

So many ways in which you can drive consumer behavior by the pricing model. Excellent, thank you. Ann, over to you.

Ann Sommer:

Well, I'm also going to give you a very concrete example. LF, Lansforsakringar, we are 23 mutuals. We do have some really good risk reduction schemes. One is for the farmers. We call it the safe farm or the safe horse farm. The purpose is to educate and make the farmers aware of all possible dangers on the farm. One particular really bad one is fire, for example, because there is a lot of big costs involved. Well, this is actually a program. It starts with an E-based or digital education for the farmer. Once they've gone through that, the mutual will send the specialists out to the farmer. They will walk around the farm and they will look at all the hazards and all the dangerous spots where the could occur an accident or electrical burnout or something. When they've gone through everything, they together make an action plan to make the farm a safer farm. Some of this can be quite costly if you have to change electricity or something. But then we have a bank within LF that will give good supporting loans to help with this.

Once the farmer has done everything that was agreed, he will get a sign, a very nice big sign to put on the farm. They will also get a risk-based premium that is a lot lower than it would have been if they didn't have certified themselves for a safe farm. There is another good thing here. Is that when people visit the farm, they will see the sign, and they will know that this is a safe farm. That the farmer is risk-aware and that he's gone through an education. He's tried to eliminate all the possible risks. So this is really a win-win thing, a safer farm, and a lower insurance cost.

Shaun Tarbuck:

Excellent. Thank you, Ann. Rob, over to you.

Rob Wesseling:

Thanks, Shaun and good day, everyone. The example that I'll share from The Co-operators is related to flood insurance. The Co-operators was the first and is currently the only Canadian insurer that offers flood insurance ubiquitously for homeowners. We were the last of the G7 countries actually to have flood insurance available. The Co-operators does this in somewhat of a unique way. We offer flood insurance to every Canadian homeowner, regardless of their level of risk. We price it to commensurate with the risks that exists. So, in some cases, it's very expensive. The important part of this is that it does send the risk signal in communities where there's a very high flood risk. Most Canadians didn't know that they have this high level of risk.

Now, interestingly, many of our clients are purchasing the coverage at the high price level, once they understand the risk. Perhaps more importantly, those communities that understand the level of risk that they're exposed to. That information gives them the opportunity to think about more systemic adaptation mechanisms like Berming Programs and the like. In insurance, I think we often make two mistakes with respect to very high-risk situations. One is we'll just simply refuse to ensure them because we believe the price is too high. That mistake eliminates the ability for communities and individuals to understand the risks that they're at. We build mechanisms to subsidize and create a lack of transparency with them. Again, that creates a false sense of security for individuals and communities. It also masks the fact that they have a significant risk, both of which are quite negative. So that's the flood insurance story at The Co-operators. Shaun, Thank you.

Shaun Tarbuck:

Thanks, Rob. So three very different ways of looking at utilizing pricing. Mami, do you have any comments? How do you think we're doing?

Mami Mizutori:

I think you're doing great. From the Sendai Framework point of view, the gist of the Sendai Framework, the global blueprint for resilience. Is to ask for behavioral change towards prevention. That means stop creating new risk and let's reduce existing risk. But if people think there's a cost associated to this, in the real sense, they won't do it. So it's very important to provide incentives. Economic incentives, in this case for risk reduction through variable pricing. We've heard very concrete, powerful examples. I would add also that many of those examples will also be important for a climate change adaptation, for mitigation, and ultimately, sustainable development as Irina mentioned at the outset. Sendai, Paris, and the SDGs are so linked together. Over to you, Shaun.

Shaun Tarbuck:

Thanks, Mami. We will try our best but I think this is certainly an area where we can do a lot and already doing a lot. Moving to number two, this is to include prerequisites and exemptions to provide incentives for risk reduction. So I'm going to start again with Hilde and then will go to Rob after that. Hilde.

Hilde Vernaillen:

Well, something I think we are all doing in our commercial lines is asking enterprises to bring in a lot of protections and show their security policies. Being more active than ever on this kind of things. To make sure, well, they do have a policy on preventing risks before we will insure them. So in commercials, I think it can have a big impact because we're insuring the big plants as well. We all know it could have very damage effects if you have fires or whatever in this kind of constructions. But also, homeowners in just fire insurance are asked to have smoke detectors, flop detectors, all that kind of things. To make sure that we can prevent risk in a very, very simple way. One we started with last year is creating a community with motorbike riders. It's very small for the moment but we created a community where they can exchange on how to drive safe as a motor-biker. It's kind of exchanging good practices on the first-hand but it's also using a lot of tools. Then again it's using them, they can have a price reduction. It's quite of length. But it's, for instance, using a pack with airbags. So meaning when you fall down, that you are protected. Also wearing devices that give an immediate sign to emergency services if needed and this kind of thing. So that's very new, it's piloting but it's doing well.

Shaun Tarbuck:

I think you won all sorts of awards for your caring for the motor-bikers. So that's excellent. Rob, over to you.

Rob Wesseling:

I'll share a bit of a different example. We have a significant problem in Canada, I think it exists elsewhere in the world as well. That is that when disasters happen, we tend to rebuild in a similar way to the way that we built before. It's really just inviting the same impact from the next disaster. One example of this is that we have very large convective storms in some parts of the country that produce significant hail. Things like asphalt shingle roofs, they just get destroyed by the hail. So at The Co-operators, we have programs in place, where if you have a more resilient roofing material as an example. Then not only will you get price reductions, that's another example in the first case, with the first mechanism. But also, you can retain your replacement cost coverage longer. So that coverage is available if you have a better roofing material, it's not available if you have asphalt shingles. Quite frankly, we should just expect that they're going to be destroyed by the next hailstorm.

If you'll allow me, there was something I wanted to share in the first point as well. It actually will flow through and be applicable to all of the examples that I'll share. Every one of these well being aligned with Sendai, well-reducing risk, well focusing on prevention as well as protection, every one of them is good business. So the Flood Insurance Program that we have in place, has driven significant growth in our premium volumes. This initiative that I've just spoken to reduces the risk in our portfolio overall. So not only is it good from our clients and our community's perspective, they're both also good business for the cooperators.

Shaun Tarbuck:

Thanks, Rob. That's a very valid point. I think everything that we're doing here is good for business as well as good for the planet. But I did like your example. It's a bill-back better example, really, isn't it? Mami, what do you think?

Mami Mizutori:

I think it's great. Of course, over centuries, I could say, insurance sector has been doing this right. Perfecting this expertise in providing prerequisites and exemptions, through automobile insurance, through life insurance. Providing incentives for people to prevent better. I see now listening to Hilde and Rob, that you're now expanding this into a more wider areas of resilience and to promote climate-friendly lifestyles. Actually, governments are already doing this too. I think learning from the insurance sector, like the National Flood Insurance Program in the United States or the reinsurance coverage in the UK. Just to mention that Rob's last point is very important. We think that resilience needs to become a business opportunity. Once it becomes a business opportunity, once it becomes a product, then it will be in the market. That will make resilience something for everybody. Over to you, Shaun.

Shaun Tarbuck:

Thanks, Mami. Covers off the first two areas, which are predominantly around the underwriting and the claim side. So we're now going to move to the investment side of the balance sheet. we're going to start with you again, Rob. How do we ensure investment reduces and prevents risks and builds resilience?

Rob Wesseling:

I'm going to start by talking about the impact investment journey at The Co-operators. Then I'm going to pivot into a bit of the art of the possible. So very, very briefly, at The Co-operators about 20% of our invested assets are in externally verified impact investments. What this means is that they have a positive externality in addition to the economic benefits. So they are doing things like creating beds and long-term care homes, creating education opportunities, creating renewable energy, amongst others. The next step for us is that we want to use the asset side of our balance sheet, we want to use these investments to build resilience as well. So imagine if the asset side of all of our balance sheets were being used to reduce risk in our urban forest interfaces if they were being used to reduce flood risk in flood-prone areas. Imagine if our capital was being used to enable these risk reductions to occur. So that's the future that we envision, that's the next step for us.

I'm very happy with the partnership that we have with UNDRR to make this happen in Canada and around the world. It's been a wonderful partnership. I think we're far more likely to be successful at leveraging this incredible amount of economic power that the industry has in total for resilience. So I'll pause there.

Shaun Tarbuck:

Thanks, Rob, that's great. Ann, over to you for some great examples from your organization.

Ann Sommer:

Well, we do have some and I was thinking of it. When it all started the investments on the sustainability side, everyone was trying to reduce the CO2 and that was the target for everything. But we have expanded that target and we are saying that 2030, all of the investments should be green, social or sustainability target investments. We are investing in bonds very speedy and meticulously because we have a climate-smart vision that we have adopted in line with our ambition to create real long-term value for our customers. In 2020 we reached 13% and that was our target then and now we will speed up even more. But how is it possible to do this and in a speedy manner? Well, we have focus on direct investments in the primary market. We found that last year in the beginning of the COVID-19 that we put together with other colleagues in the industry to have the same targets. We mobilized capital and investments. We made into social bonds with the purpose of mitigate health and economic effects from the pandemic, both locally and globally. I'm very proud of this because this happened very fast and it was needed at that time.

It's important to look at all the SDGs and also act where it's most needed because it change over time. We look at our investments on an SDG angle and systematically evaluate the sustainability effects from projects that we financed via primarily bonds. The equation is done to optimize investments and have real sustainability effects. That can be done with better data and direct insurance or bonds. Most of our money are invested in number 13 SDG, the climate action. Number two comes 11, sustainable cities and communities. Then number seven, affordable and clean energy. We work on this all the time. We look at this detail data and we sell and buy in our portfolio. In order that all the time enhance the sustainability value in the portfolio. This is new. Then you ask is there any return on this money? Yes, of course, we need return in order to grow. It's not our money, it's a policyholder's money or money that we should pay claims with. I am thinking a lot about this. About 20% to 25% of all the money in the world is in pension funds. I understand that everyone wants a good pension and retirement money. But it needs to be sustainable because if we have no plan when we retire, what will happen then? So I think everyone should look at this way.

Shaun Tarbuck:

Great challenge, Ann. I think what came through with both you and Rob there was this actually makes business sense again. Mami, what did you think?

Mami Mizutori:

This is so important, the asset side of your activities. The Sendai Framework has seven global targets, including reducing mortality, affected people, economic loss. Increasing at the same time national strategies for disaster risk reduction. Importantly, it has four actions of priority, four priority action areas. One is precisely to invest in resilience. Now, I am very encouraged to hear that is actually what is happening in the cooperative and mutual insurance sector. That you are putting your money, your investment in resilience. Rob said imagine if we put all our investment in resilience but imagine if the opposite happens. Then we are creating new risks, we are not reducing existing risk. So this is exactly what we need to do.

One very, very current test for us is are we going to invest, recovering from COVID-19, in resilience, in green, in equitable ways? I think this is, of course, for the insurance sector, which has so much asset but for the whole world. Anybody who has made money, including individuals, we have to invest in resilience. Over to you, Shaun.

Shaun Tarbuck:

Thanks very much, Mami. That's a real call to action and I think it's happening. Ann, you started a race to zero, which is a term being used by many these days. Your race to zero is now 2030 and I think Rob's is a similar one as well. So that's great. Right, we're going to move to the indirect mechanisms. Well, we say indirect but they are really, I think that they are linked. Without a doubt, we have to do the indirect as in order to influence the direct. So the first one is around raising awareness of the systemic nature of risks and provide transparent information and advice for reducing hazards exposure and vulnerability. Rob, over to you first.

Rob Wesseling:

The examples that I'll use here are all partnerships. They are examples of where through partnerships, we've been able to raise awareness around things like hail risk, forest fire risk, flood risk. One organization that we partner with is the Institute for Catastrophic Loss Production. It's housed at a university here in Canada. They do top-notch research, in terms of the type of perils that I've just described. But then publish that research, make the data available so that cities, provinces, even the national government can use it. To make sound decisions on things like building codes on things like where and how to locate and protect communities. Another is called Partners for Action and is focused entirely on flood. It is also located in a university in Canada. We're a founding sponsor of that organization. They do a great deal of work, focused on trying to ensure that Canadians understand the flood risks that they're exposed to. The majority who are in flood zones actually don't understand that they are and so they can't make good decisions if they don't have good information. I'll pause there, Shaun, thanks.

Shaun Tarbuck:

Thanks, Rob. I think that's very important, the SDG 17 is all about partnerships. I think that underpins all of the other 16 as well. So, Hilde, over to you for some examples.

Hilde Vernaillen:

I think one way of creating awareness is about education. I tried to get two ways we were using in this sphere of education that we're sharing knowledge. One is using telematics and cars and an app that we created. To, obviously, work with those telematics called We Cover. But actually, it's all about promoting safe and climate-friendly driving. The way you're driving, even with nonelectric cars is completely different in terms of impact to the environment. Now, we are even extend that educational tool to mobility as a whole. So it's not only car but it's you want to go from point A to point B. What is the best way to do this in a sustainable way and how should you look at it? So it's really educating around that theme.

Another example, a totally different domain. Again, in commercial domains, we organized twice already a kind of contests between enterprises that have the best preventions policy. But best prevention policy to us is really linked to people. So the most human, taking care of people policy. Not only people within the company but also abroad. You have the effect of the context and it's kind of publicity for them. But it's also sharing good practices in this. So you create again, a kind of community that can learn from each other. So it was not a fine example, I think.

Shaun Tarbuck:

Thank you, Hilde. This was certainly one of the areas in the report that many of our members were focused on. Just something I learned yesterday from our Danish member, LB Group. Ann Mette Toftegaard, the CEO there is on the high-level group, along with their colleagues here. They've just announced recently, announced that they've set up a Prevention Center of Excellence with EUR 35 million. So again, another big commitment from one of our members in Denmark. Over to you, Mami, any comments?

Mami Mizutori:

So I mentioned in my previous intervention that Sendai Framework has four priorities for action. The first one is understanding the nature of risk that surrounds us, which is now systemic, complex. COVID-19 is the textbook example, isn't it? So we all need to learn more about this, understand this, and understand how to deal with it. Who should be doing it? Well, everybody because risk is everybody's business. The Sendai Framework says it has to be implemented by the whole of society effort. But having said that, I cannot think of a better more adequate sector than the insurance sector to do this. Risk is your bread and butter, isn't it? I'm not surprised, Shaun Tarbuck:, that so many of your members said yes, we're doing this, we're doing that in relation to this mechanism. You are so equipped to raise awareness and make people understand the nature of risk. So I'm sure that there will be many more examples to come and many more initiatives to come. Over to you.

Shaun Tarbuck:

Thanks, Mami. Okay, moving on to the fifth one. It's about build and share capacity and technology for risk modeling, analysis, and monitoring. So we're going to have two examples here, one from Rob first, and then from Ann, if that's okay.

Rob Wesseling:

Perfect. At The Co-operators we have a number of significant partnerships with academic institutions. A lot of the work that we do with them, that we collaborate on, is focused on building models for risk understanding and risk reduction. Now, these partnerships are very beneficial, both to the academic institution and to The Co-operators. The one example share is an example where we were able to get something done that we likely couldn't have done on our own, at least not in a similar timeframe. There did not exist coastal flood models in Canada that were appropriate for flood insurance. We partnered with an academic institution that came up with an innovative way to use data that already existed. To help us build a very precise coastal flood model and map. It's one example, there's numerous examples of these types of partnerships.

It's great for the institution because they get real-world challenging research projects to work on and they get funding for the researchers to do so. It's a great opportunity for us because quite frankly, we get things done that we wouldn't be able to get done otherwise or that would have cost us substantially more to get done. Then there's one element of this that I'm very proud of. In our partnerships with these academic institutions, the outcomes are not proprietary. So that means that they can publish them and they do publish them. Then that knowledge becomes available to the whole of society, which is something that I think is very powerful. As Mami's indicated a couple of times earlier today, we need to get the information in the hands of decision-makers, so that they have the opportunity to make sound decisions. Thanks, Shaun.

Shaun Tarbuck:

That's excellent, thank you, Rob. Ann, over to you for an example.

Ann Sommer:

Well, I have a good example and that is that the 23 mutual in the LF Alliance, they're working together. They're not competing but they have a designated area actually, like a county. They have their customers there, that's where they insure. So their local knowledge is enormous. In 1936 they decided to get together and buy reinsurance together. They formed the company for doing that. This was very clever because for example, forest, it's not very likely that the forest will burn in the north of Sweden at the same time as in the south. They also have a lot of knowledge about Swedish forests that international reinsurance don't have. So they decided to keep a lot of the business in-house and insure with each other or reinsure with each other. Those were storms and natural disasters, freeze, flooding everything because it's not likely to happen in the same spot.

They could keep more money for themselves and also the knowledge. That means that the customer who is the ultimate owner pays less and contributes to a long-term good result. If there's any money left over, it will be paid back to the customers in the end of the year. But it also means that we have very good statistics and statistics, well, it has to be a lot of numbers to make really reliable calculations, as you know. We now have all of Sweden to count on. It's not needless to say but statistics are the pot of gold for insurance companies because that's how we can foresee the future. Calculate the proper risk and premium for the customer. It's all for mutual companies always to get the best deal for the customer. That is a really risk-related cost. So this is one way of doing it, I think.

Shaun Tarbuck:

Thanks, Ann. That's great. That's two examples of two national companies actually modeling in their own area and within their own communities for their own communities. So it's not always the big risk models in the world that can do this. Mami, what do you think, how we doing?

Mami Mizutori:

I think you're doing great. I think I really want to appeal to everybody. That as Ann said you have in your hands gold, which is data and statistics. I cannot go to any UN Conference without talking about data. We all say we need the data. We need data for more evidence-based policy, we need the data, open-source data, disaggregated data. Many times we think but where is the data? Data is around many places but you are the sector, the insurance sector, which has the gold, the data. If it can be made available to the policymakers, not only at the national level but at the sub-national level, and even in the local communities. Then people can make better decisions for prevention. But without that, you can't. So the benefit of data, the statistics, the worth of what you have is much more than you think. I really think that this mechanism for which we have heard already two great examples can really be enhanced. Thank you.

Shaun Tarbuck:

Thanks, Mami. As Rob said, I think you made yours open-source, haven't you? But also, sharing with governments and regions, that's also got to be a big positive step forward. Okay, we're going to move to number six, which is promote and enhance local social capital for responding to disasters and innovating to reduce risks. So we're going to have an example, just from Ann. So over to you, Ann.

Ann Sommer:

Well, this is a bit more we talked about, that Mami talked about just now. We have created a sustainable database with more than 70 variables. In here, we can see trends and developments in Sweden as a whole. For the local counties, it's an open database from official open-sources. We have collected, chose, and complied and asked and analyzed official counties, statistics from all of Sweden in four areas that we think and find are important. One is economy and possibility to earn a livelihood, health, environment, and climate. and safety. In Sweden, you would call it more peace of mind, would be a more appropriate term. Anyone can download this. It's a pot of gold but it's already there if you want to see it. We can use it, the customers can use it. Why have we done this? Well, the social and environmental financial sustainability is a key to long-term development in our societies and our civilization, as well as global, regional, and locally. We in Lansforsakringar wants to be part of the solution in the local area, where we have our customers. At the same time, see all the opportunities and challenges and they vary from different areas.

It also makes it possible for the mutual companies to link the strategies and communication and business closer to the local development. The customers that benefit from this big knowledge bank and locally fit in strategies based on facts. This is updated once a year and that's very important because things change very fast and the world is changing. To make the right decision like Mami said, you have to have updated, accurate data. The world and other countries in this are facing a lot of challenges. To make a resilient, long-term sustainable societies, it should not only be up to the politicians. I think in many cases, the mutuals are a lot more long-term than their politicians because they got to be elected. The mutuals are owned by the customers and they're always there and can make a decision for a very long time forward. So they're extremely long-term in their business.

What does the mutuals rely on? It's the customer satisfaction when the claim is there when the catastrophe happens when the fire is there or the storm or the flooding. That's when the customer needs us and then that's when we have to be there. Once again, you cannot see the future but there are effects that can show dangers and possibilities. Just before I went into the seminar, I had a look at Uppsala, which is one of the mutuals. They made a serious or really nice web educational, you could say, movies or web films. That shows what Uppsala is going through changes, climate changes, and see how the water level is rising. Anyone can look at that and see if you live there. So we are all co-creators of the world we live in.

Shaun Tarbuck:

I like that, Ann. Yes, we are trying to co-create. The social capital, there were a few examples in the report, particularly from Japan, with our cooperative insurance there. But also, a lot from the emerging markets as well as they tend to be really close to that affinity that they serve. So I think this is a very important one going forward. Mami, what do you think?

Mami Mizutori:

I totally agree with you, Shaun. This mechanism promotes and enhance local social capital for responding to disaster, innovate to reduce risk. It's so important. There are several keywords. I think local is one very keyword. COVID-19 has challenged everybody but the local communities everywhere are struggling because they are the first responders. There's really now a call to make local communities resilient. This is also what Sendai Framework says. It's not enough to have the national governments or even the sub-national governments to be resilient, it has to be at the community level. As Ann said, the cooperative and mutual insurers are part and parcel of the local community and you are there always. So there is trust. There's trust between you and the local community. So this is a very important mechanism that uniquely, your sector can enhance. I'm really looking forward to seeing this become pilot initiatives and also become scaled up and operationalized. Thank you.

Shaun Tarbuck:

Thank you. Right, turning to our last mechanism, and this is about collaborate with the public sector to signal unsustainable development and support decision-making towards DRR and risk-informed investment while closing the protection gaps. I think ultimately, that's the goal of what we're trying to achieve here anyway. So it's not surprising there were so many examples of this because that's where we're headed. That's the direction of travel. But Hilde, you've got an example from the Belgian market, haven't you?

Hilde Vernaillen:

Yes, but I think maybe first, it's very difficult to find examples of this only solely company level. You're working in a certain market and you're talking to the policyholder and talking to policymakers. It's kind of something that affects the full society where you're living in or the community where you're living in. So that's why I think it's easier to look at this, talking about national federations. What can national federations do and what can international federations do in this public, private collaboration? I have two examples, actually. One of a few years ago, where a regional government in Belgium came to the insurance sector. To talk about how to cover the consequences of underground collapsing. Actually, due to mining in the past, we have kind of cavities underground that everybody has forgotten. But when you have a lot of water coming in this, you can imagine what can happen. You have houses that just disappear like this.

So government came first to saying okay, you should find a mechanism to insure this and to cover it. We said no way, we will work together with you to make sure you prevent this kind of risk. You authorized building on these cavities and you do nothing about what made those cavities safe and preventing the floods come in and cause this kind of damages. So it was really kind of working together. Of course, we do have mechanism because the mechanism of covering national catastrophes is working in this. But it's more than that. You cannot bringing this to insurance and make sure you cover it. It's about make sure it doesn't happen anymore. So that was, in the beginning, difficult discussions. But then, in the end, we had very good discussions on that.

I would like to end with an open discussions on covering pandemic risk, which is something we are all in today. What is pandemic risk? Of course, we are talking about health and it's today we are all working on care. We're all depending on which level of the pandemic we are in, in the different regions of the world. But it's about care but in the future, it's about prevention. It's about redefining the role of the first-line health caring system. This is a discussion private insurers, public insurers, and policymakers should have together. It will not work with only the public sector and it will not work only with the private sector. So it is something we are just starting with in discussions with our governments in Belgium. But then it's also about preventing the adverse effects of a lockdown, for instance, and the economical consequences of that lockdown.

But again, today is too late because when you're in it, you can't do anything about it anymore. But for the future, I think it's also about preventing these [catastrophical 01:00:22] economic consequences that we had due to the lockdown. Which is public decision with private consequences and again, public consequences. So I think private insurers should work together with national governments. But for us at the European level, as well but also on the global level. On how we can find mechanisms to cover the risk on one side but certainly to prevent the risk and to avoid this kind of consequences in the future. So I really think this work for the insurance industry as a whole into different communities and each on this level. But it will be a really important one for the future, I think.

Shaun Tarbuck:

Thank you, Hilde. Excellent example and I think, ultimately, if you just take the first part of number seven, that's about the collaboration between private and public sector. This is a perfect example of it. We need to develop more, we need to break out of our silos. But I think we're doing that, we have the process started. Hopefully, we've got time to get on with it. Mami, what do you think?

Mami Mizutori:

Yeah, Hilde mentioned it, Rob mentioned it, Ann also mentioned it. Partnership is the key to doing things successfully. But I think we have a problem here because if Hilde and others struggle to find a lot of examples of public, private partnership, we have to change this. Also, the other thing is, as Hilde mentioned, it shouldn't be an afterthought after a disaster strikes us. We need the public, private or the private, public partnership before the disaster comes in prevention. We need to design together the plan, we need to design together the strategy, and we need to prevent together. So it has to be something that we start now, we need to have better examples. One thing that the UN has, we don't have much things, we don't have assets, we don't have money. But we have what we call the convening power. So I would like to commit to you that we will convene this, we will work with you, we will work with the government. We will work so that COVID, private, public partnership becomes much stronger mechanism in prevention. Over to you, Shaun.

Shaun Tarbuck:

Thank you, Mami. That's a great statement to make. We are in the question time now. I've got a few questions that have come through on the chat box there. So if you've got any more, this is the time to ask them as well. But Mami, when we started this, always towards the end of the report process, we also started to look at what the next steps were. So what from your perspective, do we need to do better in order to make this become a real action plan?

Mami Mizutori:

Yeah, so Irina explained the three steps at the beginning and we're very proud to launch this report with you, with the seven solid mechanisms, and the pilot initiative. Some have already started. But I think we need many more pilot initiatives because we need to understand better what are the barriers and bottlenecks to really implement these seven mechanisms? We need to understand what kind of dialogues we need to have with other partners, including governments and in regulators, in order to make these mechanisms operational. We need to have more additional research and collect more data once again. So I would like to really make a call that for the next step, we need... I know that 150 members of ICMIF are with us today. I really want to make a call to all of you. Please join us in this second phase of pilot initiative and we need to be quick. Like Ann said we don't have much time and let's make it into the operationalize phase without delay. So I think this is really important for the next step but we need to do this together. Shaun, over to you.

Shaun Tarbuck:

Thanks. Rob, you were one of the first ones to grab this as a pilot initiative. Do you want to sort of talk a little bit about your journey so far?

Rob Wesseling:

Essentially, the goal that we have with our pilot initiative is to create the opportunity for there to be a marketplace for bonds or some other financial vehicle. That would allow organizations like The Co-operators but other like-minded organizations as well. To be able to fund the infrastructure build, to reduce risk in the country. So whether that's an urban forest interface, whether it's a reducing risk in a floodplain, it could be any of those. So what we're doing right now is we're doing the legwork to understand what that mechanism might look like, who the partners would need to be in order to bring this about. Clearly, municipalities, cities, provinces are going to need to be involved and onboard. There'll be the recipients of these infrastructure builds but also the broader investment community. So many of the partners that I've talked about in academia as well are being brought on board. So that we can ensure that we have the right projects with the right economics, and also the right resilience over the long-term. So that's what we're up to, it's early days but it is exciting. As Mami said, it's our intention to move fast.

Shaun Tarbuck:

That's excellent, Rob. Really, it's holistic thinking and it's trying to get everyone on the same page. That's brilliant, it's not easy. Hilde, have you got any thoughts on that?

Hilde Vernaillen:

Well, it's also an holistic view of it but maybe a different approach. Meaning that what we will try to do is pilot a lot of small initiatives. Meaning we will try to apply the seven mechanism in everything we're doing. Meaning having it kind of embedded in the governance, in the decision-making process, and product development, and so on. Having prevention and now we have that framework of the mechanism everywhere. Then yeah, again, of course, trying to measure which kind of impact we have on risk reduction, thanks to those different initiatives. I think it should become kind of natural way of thinking when you are thinking about insurance solution. That it is first prevention and as one of our members said, the ultimate goal is to make insurance redundant.

Shaun Tarbuck:

Yeah, we know who said that one. That's a great statement. But if we do the seven mechanism right, maybe that's where we end up. Then we can change the title of insurance to just being lifestyle organizations or something. Ann, have you got a view? You're always the big picture person as well. Have you got a view on where we may end up?

Ann Sommer:

Well, if I take the Lansforsakringar's view, they're extremely local. Due to COVID-19, I think this is going to stay for many, many years. People have now been at home and they live in a community life that maybe they hadn't really seen it before. They've been busy going to work, living in cities, and so on. So I think we will have a lot of things happening more locally and people will be aware of their environment, maybe in another way. So local is very, very important. But also the global view because that scares me a bit. That we now see each other, we don't meet, and how will the future be? In order to develop things and I mean the pot of gold and I mean all the seven mechanisms, everything. We need to meet because it's in the people to people meeting, that's when the ideas, the really good ideas come forward. So that is a challenge for us all in the world for the future but very, very important.

Shaun Tarbuck:

Thank you. Mami, a question for you. So what do you think the key moments in terms of delivering events are if we are to succeed in our ambitious targets for this collaboration?

Mami Mizutori:

So I talked about getting the initiatives together and I made a call to all ICMIF members. But we also need to as everybody was saying, promote this what we're doing to the other partners. I think Cop 26 is a very important opportunity. The regional platforms for disaster risk reduction that will happen most of them this year will be important. We really need to have a lot of pilots and initiative going across regions because every region has its unique problem. Then next year in May, we have the Global Platform for Disaster Risk Reduction. At which I think around that time, we can really make this project a global one. As we were mentioning at the beginning, bring in the whole insurance sector, and then do even wider financial sector.

I think these as opportunities, so I really look forward to using these opportunities to advocate war, tell the world what we are doing together, ICMIF and UNDRR. So that this can become an operational global project.

Shaun Tarbuck:

Thank you, Mami. I think having those punctuation points at certain times are very important. It gives us a target to move towards and certainly, we will be there on the journey together, I hope. We've probably done... We've had all of the questions we can have now. I've just wanted to lay out a couple of minutes just for Mami and then Hilde, to sum up, if that's okay. It has been a very rich and diverse conversation up to now. So, Mami, I'll let you go first from your point of view.

Mami Mizutori:

The report itself it's very encouraging, what we managed to put in there, the seven mechanisms. That came out from what's already happening in the cooperative insurance sector. But today, we heard of many other more wonderful examples, which is even more encouraging. I'm sure that there's a lot of gold as Ann said among your members. So I really want to dig with you those gold and make it together into a resilience for the globe.

Now, I'd like to just mention a lot of thank you to you, Shaun Tarbuck:, Hilde, Rob, Ann. Then I'd like to thank the ICMIF high-level steering group. I would also like to thank with your permission, my own team in UNDRR, Irina, Seramah, Damien, and Daniela, and Paula who led this. I really think that this is such an important part of our work, six years on from Sendai. We have made a lot of plans, we have a lot of strategies, now is the time to put them into action. You said that Rob when we were together in Auckland. You said that we have to stop just talking. I see that this project will be something that will not only be words because there are already a lot of actions there. So the issue or should I say the challenge is to scale it up and make it global. I think it's possible. Over to you, Shaun Tarbuck:.

Shaun Tarbuck:

Thank you, Mami. Hilde, over to you.

Hilde Vernaillen:

Thank you and from my side as well, thank you to all of you for the interesting examples, questions, and participation today. But also, in the construction of the report and special thank to UNDRR, to Mami, and to the staff of UNDRR for their leadership in this important matter. Yes, indeed, we are all convinced that the only way forward is moving from protection to prevention.

As ICMIF, we were really very, very proud and very happy to work together. To be able to show this practical path to more resilience based on those seven mechanisms. But to me, it's only a start point, it's only the beginning. This report is really a call to action. Of course, a call to action to all ICMIF members to embrace this report and to work with the mechanisms. I would like really to encourage all the ICMIF members to use the framework and to tell us what they're doing. So we can further work on it and even make more progress. So I think it's really something we can build on and show what we can do as mutuals and co-ops in this disaster and risk recovering.

But it's also to the full insurance industry. It's a call to take action to everybody in this world. So I would like to tell everybody feel free to use the mechanisms, the more the better or whoever using it, it's all good. It's really my sincere wish that our ambition is to encourage more widespread with prevention is realized. So for the sake of humanity, please build on this further. As Mami said just not only words but actions is important in this matter. Thank you, all.

Shaun Tarbuck:

Thank you, Hilde, thank you, Mami, some wise words to finish on here. I certainly think speed and action are the two things that we need to really focus on. If you look where we were no more than 18 months ago in Auckland, where the conference was really focused. The themes that came out loud and clear was sustainability and the move from protection to prevention. They were the two major themes in a three-day conference for all of our leaders. We've done something in a short space of time that hasn't been done before. We've now got to carry on doing that. I think this gives us a great platform, a starting point from which to build. Hopefully, everyone will benefit from that.

So thank you for being a wonderful set of panelists, I think this has been a very rich conversation. I thank you for giving up your time and the energy and the research you've put into it as well. Also, thank you for being on the high-level committee because I think that's going to continue to grow and continue to drive the direction of both our organizations as we collaborate more and more. Show the rest of our sector, shall I say. I say insurance sector but also the UN sector that the silos are being broken down and that's the only way we can do it. So thank you, everybody.

I look forward to seeing you all somewhere in the future. Thank you.

The above text has been produced by machine transcription from the webinar recording. ICMIF has made every effort to ensure that transcriptions are as accurate as possible, however, in some cases some text may be incomplete or inaccurate due to inaudible passages or transcription errors. Listening to or watching the webinar recording will allow you to hear the full text as delivered during the webinar but this is available in English only. Our transcriptions are provided to enable members to select the language of their choosing using the dropdown menu above.

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