Insurance reduces the vulnerability of people affected by extreme climatic events and better protects their resources.

This morning I had the pleasure of opening the 3rd. Insuresilience Global Partnership Forum, which centered on Climate and Disaster Risk Finance and Insurance Solutions in the Caribbean, Latin and Central American regions.

During my speech, I explained that there is a large, and in some places growing, insurance protection gap in Latin America that needs to be addressed. Private insurance is not widespread among the population. The amount of catastrophic losses covered by insurance in the region over the last twenty years or so is below 20 percent, on average. In the case of floods, the protection gap is even greater, below 10 percent. This means that at least 80 to 90 percent of the total losses are not covered.

At least 80 to 90 percent of the total losses are not covered.

It is therefore crucial for governments in Latin America to better recognize the role and benefits of insurance as an efficient tool in protecting and compensating these kinds of catastrophic risks.

Natural disasters can have a huge cost in terms of lives lost, but they also cause massive damage to infrastructure, homes and businesses, severely disrupting economic continuity and people's day-to-day lives.

Climate risk insurance can help those affected by extreme weather events to reduce their vulnerability exposure and better manage their resources. The experience of many developed and developing countries proves that public policy can protect the lives and livelihoods of the vulnerable population by incorporating insurance mechanisms to compensate for the economic and social effects of natural disasters, thereby reducing the public burden.

Climate risk insurance can help those affected by extreme weather events to reduce their vulnerability exposure and better manage their resources.

The Partnership Forum is one of the bodies of the InsuResilience Global Partnership, an institution created in November 2017, and officially launched at COP23, the UN Climate Change Conference held in Bonn. It brings together G20 countries in partnership with the G20 nations, as well as international organizations, the private sector academia and society at large.

The Forum takes place against the backdrop of COP25, the UN Climate Change Conference currently taking place in Madrid. The vision of the InsuResilience Global Partnership is to strengthen the resilience of developing countries and to protect the lives and livelihoods of poor and vulnerable people from the impacts of disasters by enabling faster, more reliable and cost-effective responses to disasters.

These types of forums are a commendable initiative, as they foster dialog among governments, policymakers, standard-setting bodies and regulators across sectors, encouraging them to work in a more coordinated fashion in order to address key barriers that hinder insurers from scaling up their contribution to climate adaptation and mitigation.

Have no doubt that the threat we face is very real: recent evidence points to how the impact of natural disasters is evolving in terms of variables such as global warming, population growth and human and urban development patterns, resulting in greater exposure and consequently more significant potential economic damages.