How insurance can help build future-ready nations

ACROSS emerging markets and developing economies (EMDEs), floods, droughts and extreme weather events are highly consequential risks, repeatedly testing public finances, livelihoods and critical infrastructure. For decades, the dominant response has been to mobilise resources after disasters strike. Today, that model is no longer sufficient.

The defining question for governments is not whether climate impacts will intensify, but how nations can become truly future-ready by shifting from reactive crisis response to pre-empting risk and pre-arranging finance before disasters occur.

This strategic shift is critical. Pre-arranged financial protection enables faster response, greater fiscal stability and more effective support for vulnerable communities when shocks hit. Insurance, when deployed thoughtfully and in partnership with the public sector, can play a decisive role in this transition, linking risk data, financial preparedness and institutional resilience.

Bringing the capabilities of the global insurance industry to bear on this challenge through concrete, in-country programmes across EMDEs is inherently complex and long-term work, requiring sustained collaboration between governments, insurers, development partners and local institutions. Yet the results emerging on the ground demonstrate what is possible when those partnerships are aligned around shared resilience outcomes.

Extending disaster risk protection
Over the past year, Insurance Development Forum (IDF)-driven programmes have directly or indirectly extended disaster-related risk protection to more than four million people. These figures matter, but they only tell part of the story. The deeper impact lies in how these initiatives strengthen local risk understanding, build institutional capacity and embed insurance within national strategies for disaster risk financing and climate resilience.

A number of these initiatives are being delivered through the Tripartite Agreement Programme of the IDF, the United Nations Development Programme (UNDP), and the German Federal Ministry for Economic Cooperation and Development (BMZ) through the InsuResilience Solutions Fund (ISF), which provides a structured operational platform to translate public-private collaboration into insurable solutions on the ground.

In Lagos State, Nigeria, a Tripartite urban flood risk project illustrates this approach.

IDF members AXA Climate and Swiss Re worked with ARC Ltd, Axa Mansard, Iceye, and JBA Risk Management, in close partnership with UNDP and the Lagos government, to design a parametric flood insurance product for public assets. The project was underpinned by the creation of a comprehensive public asset database and advanced flood risk models. Once the product is placed in the local insurance market, the solution will indirectly protect around four million people, while significantly strengthening institutional risk management capacity at state level.

Agriculture remains one of the most climate-exposed sectors across EMDEs, particularly for smallholder farmers. In Uzbekistan, a Tripartite project led by IDF members Europa Re and Swiss Re, in partnership with UNDP and supported by BMZ through the ISF, resulted in the launch of a parametric insurance product tailored to smallholder horticulture farmers. The product covers six crops across five regions, and is supported by a 50% government premium subsidy, marking a significant step forward in agricultural insurance market development.

In Syria, meanwhile, a $9.25m drought macroinsurance policy was launched in 2025 to support World Food Programme (WFP) operations in one of the world’s most fragile contexts. Developed through the IDF’s Sovereign and Humanitarian Solutions Working Group by Hiscox, Howden and Swiss Re, in collaboration with Humanity Insured, and funded by the World Bank’s Global Shield Financing Facility, the UK Foreign, Commonwealth & Development Office (FCDO) and BMZ, the policy protects 240,000 people against food insecurity. A $7.9m payout enabled rapid response also in 2025, in reaction to the worst drought in 50 years, demonstrating how insurance can shift humanitarian action from reactive appeals to pre-arranged financial preparedness.

“Across EMDEs, climate risk management is increasingly moving away from reliance on post-disaster assistance towards pre-arranged, risk-informed financial strategies that can be activated quickly and predictably when shocks occur”
_{Ivo Menzinger
Insurance Development Forum}

Beyond product development, strengthening the climate and disaster risk understanding and risk analytics that make pre-arranged finance possible is equally critical in EMDEs. With funding support from BMZ and in partnership with the ISF at Frankfurt School of Finance and Management, the IDF’s risk modelling steering group is now working in countries through the public-private Global Risk Modelling Alliance (GRMA). The GRMA shares its insurance risk thinking and skills in risk quantification with resilience policymakers, regulators and others, conducted with governments to help them identify risk informed decision makers. During an 18- to 24-month programme, the GRMA builds capability in ministries, agencies and the domestic market, working on practical projects and filling critical model and data gaps. IDF experts in the GRMA collaboration are currently working with the governments of Costa Rica, Madagascar, Ghana and Malawi. Projects are in the pipeline in Latin America, Africa and South Asia. The sovereign determines the priorities and co-defines the projects – examples include urban flash flooding in 5 cities in Ghana; impacts of cyclone, flood and drought on farmers in Malawi, and threats to infrastructure in Costa Rica.

This work demonstrates how IDF, through the GRMA, is building national risk insight to inform better resilience strategies and unlock more effective disaster risk finance solutions.

Infrastructure Resilience
Infrastructure resilience is another critical frontier. Through the joint IDF-Agence Française de Développement (AFD) IDRIMA programme, projects are currently being implemented in Costa Rica and Mozambique. In Costa Rica, a parametric insurance policy is being structured to protect the state-owned electricity provider from drought-related losses in hydropower generation. In Mozambique, work is under way to strengthen protection for the assets, operations and revenues of the national rail and port operator managing the Nacala, Beira and Maputo corridors, infrastructure that underpins the country’s economic resilience.

These operational programmes are complemented by efforts to mobilise capital at scale.

In late 2025, the IDF announced the first close of the Infrastructure Resilience Development Fund (IRDF), raising $340m. Backed by Axa, Convex, Generali, Scor, Swiss Re, Zurich and the International Finance Corporation (IFC), and managed by Global Infrastructure Partners (part of BlackRock), the fund is designed to invest in resilient infrastructure across EMDEs, from energy and water to transport and health.

Changing global strategy on risk financing
These examples represent only a fraction of the work being undertaken by the IDF and its members and partners. Taken together, however, they point to a deeper, ongoing strategic shift.

Across EMDEs, climate risk management is increasingly moving away from reliance on post-disaster assistance towards pre-arranged, risk-informed financial strategies that can be activated quickly and predictably when shocks occur. This is not a one-off transition, but a structural change in how governments plan for, finance and manage disaster risks, one that will continue to evolve and deepen in the years ahead.

Crucially, this shift is being shaped through collaboration.

The experience of working alongside governments, development institutions and local partners in EMDEs has also transformed how insurers understand climate risk itself. The focus has expanded well beyond traditional instruments or standalone catastrophe solutions. Today’s resilience toolkit spans parametric insurance, macro and meso-level covers, risk data and modelling, disaster risk reduction, public asset protection, premium financing, and the mobilisation of long-term capital for resilient infrastructure. It reflects a growing recognition that effective disaster risk management requires integrated solutions and shared ownership across public and private actors.

Building future-ready nations is therefore not about exporting a fixed model, but about co-creating approaches that respond to real-world constraints and opportunities. It demands patience, trust and sustained commitment from all sides. The IDF’s experience shows that when this collaboration is done well, insurance becomes more than a financial product. It becomes part of the institutional fabric that enables countries, and the global insurance industry itself, to better anticipate risk, manage uncertainty and strengthen resilience in a changing climate.

Our collective next challenge is scale — expanding on what has been built so that pre-arranged risk finance becomes the norm rather than the exception across EMDEs.

Ivo Menzinger is chair of the Insurance Development Forum’s operating committee