Joy Agwunobi 

As global disasters become more frequent, destructive, and financially crippling, the Insurance Development Forum (IDF) has renewed its call for countries and the private sector to prioritise funding resilience over disaster recovery, warning that unchecked risk exposure threatens economic stability, development, and the affordability of insurance itself.

This message, anchored on the 2025 theme for the International Day for Disaster Risk Reduction (IDDRR), “Fund Resilience, Not Disasters,” underscores the urgency of scaling up disaster risk reduction (DRR) financing and embedding resilience into all investment decisions.

According to the United Nations, the true cost of disasters globally including disrupted livelihoods, damaged infrastructure, and mounting debt may be as high as $2.3 trillion annually, far exceeding the $200 billion usually reported in direct economic losses.

In a joint statement from Zurich Insurance’s Saoirse Jones and the United Nations Office for Disaster Risk Reduction (UNDRR)’s Mathieu Verougstraete, both members of the IDF operating committee and co-chairs of its DRR Working Group, the experts warned that failure to act decisively could undermine both development progress and the insurability of risk worldwide.

“Investing in disaster risk reduction is fundamental to keeping risks insurable in the long run. Without it, insurance will become increasingly unaffordable;not only for individuals, communities, and governments, but also for the major infrastructure projects that underpin future prosperity,”the statement said.

Safeguarding the Future of Insurability

The IDF, a public–private partnership led by the insurance industry in collaboration with international organisations, has made disaster risk reduction central to its global resilience agenda. The group argues that risk reduction forms the foundation of insurability, ensuring that disaster risks remain financeable, bankable, and manageable in a world of rising climate and economic uncertainty.

Insurance, the IDF noted, thrives on managing uncertainty. However, when risks escalate beyond manageable thresholds, even the best-designed insurance systems face collapse leaving societies more vulnerable to shocks.

Through its Disaster Risk Reduction Working Group, the Forum is uniting public and private actors to translate risk awareness into practical resilience-building actions across local, national, and regional levels.

Turning risk into resilience

To strengthen the resilience of vulnerable economies, the Insurance Development Forum (IDF) is spearheading a series of strategic initiatives that mobilise insurance expertise and capital toward building long-term resilience against climate and disaster risks.

One of the flagship programmes is the Infrastructure Resilience Development Fund, a blueprint designed to channel insurance sector investment into resilient infrastructure projects across emerging and developing economies. The initiative seeks to safeguard vulnerable communities from the worsening impacts of climate change and natural disasters. According to the organisation, the fund’s first close is imminent,a milestone that will translate years of strategic planning into tangible financing for resilience-building projects.

Another major effort is the IDF–ADB Insurable Infrastructure Initiative, developed in partnership with the Asian Development Bank (ADB) to enhance infrastructure insurability in the Pacific region. The partnership focuses on developing a comprehensive regional strategy that integrates risk advisory services, hazard scenario planning particularly for threats such as tropical cyclones and practical recommendations that enable governments to design adaptation projects which are both bankable and insurable.

At the same time, the Forum is promoting the mainstreaming of disaster risk reduction (DRR) across the global insurance industry. Through a framework comprising seven practical mechanisms, the IDF is helping insurers embed DRR principles into their operations and product design. These mechanisms include strategies such as variable pricing models, risk-based coverage conditions, and targeted investments in resilience measures. Initiatives like the Resilience Hub are further supporting insurers in applying these tools, ensuring that risk reduction becomes a core feature of their business models rather than an afterthought.

The IDF’s commitment to strengthening resilience also extends to risk engineering and advisory services, where its members continue to provide governments and private developers with technical expertise on risk-informed urban zoning, resilient building codes, and pre-disaster mitigation planning. By helping countries address structural vulnerabilities ahead of time, these advisory services aim to minimise residual risks before they escalate into full-blown disasters.

In addition, the Forum is driving innovation in risk modelling and data transparency. In April 2025, its Risk Modelling Steering Group launched a suite of open-access disaster modelling tools designed to enhance national ownership of disaster data and improve decision-making. These tools, freely available to governments and institutions, allow for more accurate identification of high-impact areas where resilience investments can yield the greatest public benefit.

Finally, through its Law, Regulation & Resilience Policies Working Group (LRRP), the IDF is shaping policy environments that encourage proactive risk reduction. By contributing to key international frameworks such as the joint IAIS–World Bank paper for the G20 Sustainable Finance Working Group, the Forum is helping to establish regulatory systems that expand what can be insured and promote resilience as a fundamental pillar of sustainable finance.

Reinforcing its commitment on the International Day for Disaster Risk Reduction, the IDF joined the UN in calling for governments and donors to scale up DRR financing. Currently, less than 1 percent of global budgets is directed toward prevention and risk reduction efforts,a figure the Forum says is alarmingly low given the escalating costs of disaster response and recovery.

“It costs far less to prevent losses than to pay for disasters later,” the Forum stated, urging national governments, development finance institutions, and private investors to make risk-informed, climate-aligned, and resilience-driven investments a standard practice.

The IDF highlighted that every $1 invested in resilience yields up to $4 in avoided losses, with long-term benefits extending beyond immediate protection to include macroeconomic stability, reduced humanitarian emergencies, and sustained insurability.

The Forum’s DRR Working Group aims to elevate disaster risk reduction as a strategic complement to traditional protection gap solutions, thereby increasing the resilience of vulnerable communities and economies. It also seeks to embed a DRR perspective across all IDF programmes while amplifying the role of insurance as a proactive tool for prevention, not just post-disaster compensation.

These objectives align with the findings of the 2025 joint paper, “From Risk to Resilience: A Call to Action for Disaster Risk Reduction and Finance,” developed under the Bridgetown Initiative and the IDF. The report advocates for a systematic integration of risk reduction into all development spending and a scaling up of public–private partnerships to ensure that disaster risks remain both financeable and insurable.

“Through our collective efforts, we are not only addressing today’s disaster risks but shaping a future where resilience is embedded into every financial and policy decision,” Jones and Verougstraete affirmed.

As climate-related and man-made disasters continue to escalate in frequency and cost, the IDF emphasised that  investing in resilience is not an option—it’s an imperative for global stability and sustainable growth.