The financial risk of crisis sits of the shoulders of almost every person in developing countries. And yet the volume of development resources going into financial risk management, whether through public financial management, sovereign and sub-sovereign risk finance solutions, or insurance market development, remains very low. The vast majority of crisis financing still occurs after crisis, if it happens at all.

THE DEMAND FOR FINANCIAL RESILIENCE SERVICES IS RAPIDLY INCREASING

In just the last year, UNDP's Insurance and Risk Finance Facility received requests from 35 countries beyond its existing resources, asking for a range of support across insurance, risk financing and risk transfer. The expanding volume of these requests underlines not only the general need for more resources for insurance and risk financing but also a recognition of how UNDP itself can and should expand its work in this space, bringing in more expertise, building more partnerships, and increasingly helping more countries put risk transfer at the heart of development.

Some of the trends of the year ahead:

New Initiatives Developed and Delivered

A new set of initiatives and work are already planned for delivery in 2024, including the launch of the global Challenge Fund and the IRFF training platform for countries and insurance practitioners in developing countries. There will be a strong focus on the integration of insurance and risk financing into development, with work on the interplay of risk transfer with Nationally determined contributions (NDCs), National Adaptation Plans (NAPs), Public Financial Management initiatives and Integrated National Financing Frameworks.

Partnerships Enhanced and Scaled

UNDP will continue to develop and implement its existing partnerships, including the 17 industry partners of the Tripartite Agreement and the bilateral partnerships with ICMIF, Generali, and Milliman - making good on its commitment to be a foundation for increased technical and financial resources for at-risk countries. Several new partnerships will also be launched in 2024 – watch this space!

Global Ecosystem for Insurance and Risk Financing Expands

It is highly likely that 2024 will see further investment in the global ecosystem for risk transfer, especially as attention shifts to the creation of a Loss and Damage fund ready for COP28. UNDP, through its work within the UN System, Global Shield Against Climate Risk, Insurance Development Forum, and more, will continue to play its role in putting insurance and risk financing at the heart of development and working with government and partners to build the financial resilience of communities and countries across the world.

The IRFF Continues to Grow

To meet the growing demand both within existing countries of operation and beyond to new countries, the IRFF's ambition is to grow operational work to 50 countries by 2025. This expansion will be both geographic and programmatic, with new areas of added that have been in development, such as dedicated work for fragile and conflict-affected states.

All these developments align with the IRFF's commitment to proactively address risks and build financial resilience in an increasingly uncertain world.

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