Joy Agwunobi
The Insurance Development Forum (IDF), a global public-private partnership uniting leaders across the insurance industry, has released a new position paper calling for a rethinking of global insurability standards to help bridge the widening protection gap between insured and uninsured losses from natural disasters.
Titled “Increasing Insurability to Close Protection Gaps,” the report underscores the urgent need for coordinated action between governments, regulators, insurers, and development partners to strengthen resilience and expand insurance access, especially in emerging markets and developing economies (EMDEs).
According to the IDF, more than $180 billion in natural catastrophe losses go uninsured globally each year, with EMDEs suffering the most severe economic and social consequences. In many of these markets, insurance penetration remains as low as 3 percent, leaving households, businesses, and governments financially exposed when disasters strike.
Developed by the IDF’s Law, Regulation and Resilience Policies Working Group, the paper identifies key barriers to insurability ranging from weak policy frameworks and limited data access to behavioural and affordability challenges and provides actionable recommendations to overcome them.
The IDF stresses that reducing disaster risk through proactive policies can make insurance both more affordable and sustainable over time. The paper highlights the importance of government investment in resilient infrastructure, strict enforcement of building codes, and discouraging development in high-risk zones as foundational steps toward increasing insurability.
It further calls for open access to hazard and exposure data, along with public education initiatives aimed at improving risk awareness. These, the report notes, are essential to fostering a culture of protection and risk preparedness in vulnerable regions.
Another central theme is the strengthening of public-private partnerships. The IDF advocates for the adoption of pooled risk mechanisms, catastrophe backstops, and concessional financing tools to expand coverage in underserved markets. Regulators, it says, must also make “insurability” a clear policy objective by creating frameworks that encourage innovation and proportional regulation tailored to local realities.
Beyond regulatory measures, the paper highlights the need for greater investment in insurance literacy, and for the design of products that reflect local conditions and risk profiles. Addressing behavioural factors that discourage individuals and businesses from purchasing coverage such as lack of trust or limited understanding of insurance value—is also identified as critical to driving uptake.
Through these recommendations, the IDF argues that risks often deemed “uninsurable” can, in fact, become manageable if underpinned by sound policy, innovation, and collective commitment.
Ekhosuehi Iyahen, secretary general of the Insurance Development Forum, said the report is a call to challenge long-held assumptions about the limits of insurability.
“For too long, we have accepted that large swaths of the world are ‘uninsurable’, leaving their populations unprotected. But ‘uninsurable’ should not be a verdict – it should be a challenge,” Iyahen said.
Iyahen noted that the paper seeks to redefine insurability not as a fixed attribute of any market, but as a condition that can be created through deliberate policy choices, innovation, and collective effort. She explained that by turning risks once considered uninsurable into insurable ones, stakeholders would go beyond merely closing financial gaps to fundamentally reshaping what it means to protect, collaborate, and thrive.
Similarly, Bill Marcoux, Co-chair of the IDF Law, Regulation and Resilience Policies Working Group, emphasised the importance of deliberate collaboration to build resilience globally.
“If we are serious about closing protection gaps, we must confront insurability head-on. The paper Increasing Insurability to Close Protection Gaps underscores that governments, regulators, the insurance industry, development finance institutions and others all need to act, insurability is not static – it can be strengthened through deliberate policy, sound regulation, technical precision, and cross-sector collaboration. The cost of inaction is far greater than the cost of ambition,”Marcoux said.
By setting out a roadmap for practical, scalable solutions, the IDF aims to demonstrate that protecting the world’s most vulnerable communities from disaster losses is not beyond reach, but rather a matter of shared vision, investment, and willpower.
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