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Cambridge Institute for Sustainability Leadership

16 May 2017 – ClimateWise publishes new guide to multi-sector collaboration on infrastructure risk and resilience.

CIP-cover.jpgEmerging economies face growing pressure to deliver vital infrastructure to support the socio-economic development of local communities. The costs are vast, with recent estimates suggesting that by 2025 US$78 trillion will need to be spent globally on infrastructure, with the majority in emerging economies. Given infrastructure life span, many decisions today will have long and lasting impacts on the communities they serve. 

However, across emerging economies, investors and insurers are often only included in the project pipeline once most of the major development decisions have already been made. This delay often exacerbates project risk, especially in countries where insurance penetration is low – in many emerging economies it is lower than 1 per cent of GDP. It also limits the potential contribution by insurers, who often have extensive knowledge and expertise that could support cities make more informed risk management decisions.   

Recognising this challenge, and drawing on its participation in a partnership of insurance and non-profit organisations, ClimateWise – a global network of 29 leading insurers with a commitment to reducing the impacts of climate change – has launched a guide, to support collaboration between the public and private sectors. Its aim is to promote sustainable, financeable and insurable infrastructure that meet the needs of local communities. 

The City Innovation Platform: A guide to multi-sector collaboration on resilience captures learnings from a unique workshop held in Dar es Salaam, Tanzania, east Africa’s largest city in 2016. Dar has seen unprecedented urbanisation in recent years. It is doubling in size each decade and is currently home to approximately 4.5 million people. This has led to dramatic urban sprawl, resulting in 70 per cent of urban dwellers living in unplanned and informal urban settlements. The city’s leadership is struggling to deliver many of the basic service delivery needs of their inhabitants. This exposes those populations to high levels of physical, social and economic risks. 

The guide draws on the City Innovation Platform (CIP) workshop, a collaboration between Dar city officials, insurance industry organisations and asset managers. Partners included Global Infrastructure Basel, ICLEI-Africa, Marsh, Munich Re, Santam, Sanlam, UNEP-Fi Principles for Sustainable Insurance, the Cambridge Institute for Sustainability Leadership and ClimateWise. Together, they explored how insurance industry risk expertise could support Dar es Salaam to make more informed decisions on managing infrastructure risk and thereby reduce underwriting costs. This guide highlights the many opportunities for supporting more aligned risk management activities. It is designed to support future replication of the Dar workshop.  

Maurice Tulloch, Chairman of ClimateWise and CEO International and Chairman, Global General Insurance at Aviva said:

“The City Innovation Platform (CIP) is a perfect example of the type of innovation required to re-think our insurance offering for communities highly vulnerable to risk. It reflects insurers collaborating with city leaders to actively identify how the industry can help them respond to the various challenges they face in providing service delivery to local communities. This CIP methodology is intended to support replication by others and show that, as an industry, we have a significant role to play in helping society respond to the protection gap.” 

Isaya Mwita, Lord Mayor Dar es Salaam said:

“Climate change is expected to increase the intensity and frequency of existing hazards, with cities such as Dar we Salaam spending millions in reconstruction after every event. We highly recommend the involvement of the private sector, especially the Insurance industry to help find ways to build more resilient cities for our people. Let the Dar es Salaam workshop be a trendsetter; to cities aspiring to build resilient infrastructure and to cities working with the Insurance industry to reach their goals.”