The United Nations Development Programme has launched an initiative to help governments and the private sector in developing countries provide insurance for crises such as pandemics and natural catastrophes, it said on Monday.
Disaster recovery costs the world’s 77 poorest countries an average of $29 billion annually, the UNDP said in a statement.
Only 3% of this cost is covered by insurance, forcing countries to bear the cost of recovery themselves or rely on humanitarian aid, the UNDP added.
The Insurance and Risk Finance Facility is backed by 35 million euros ($41 million) from the German government, the UNDP said.
The facility will also have funding from other sources, including the UNDP itself, a spokesperson said.
The UNDP is aiming to help create insurance protection from socio-economic, climate and health-related disasters in more than 50 developing countries by 2025, it said.
“Insurance and risk-finance products, tools and services can secure our critical infrastructure, protect our agriculture and businesses, and preserve critical ecosystems that make life on earth possible,” said UNDP Administrator Achim Steiner.
As part of the program, the UNDP said it will work with governments on climate risk modeling. ($1 = 0.8522 euros)