International Association of Insurance Supervisors publishes G20 paper with the World Bank on narrowing natural catastrophe insurance protection gaps

The International Association of Insurance Supervisors (IAIS) published an input paper developed with the World Bank Group for the G20 Sustainable Finance Working Group on identifying and addressing natural catastrophe (NatCat) protection gaps. The paper is positioned as a practical “guide for action” for governments, supervisors and the insurance industry, with particular focus on emerging market and developing economy (EMDE) jurisdictions. The paper frames NatCat protection gaps as a global challenge and highlights that EMDEs face disproportionately higher gaps due to low insurance penetration, affordability constraints, underdeveloped insurance markets, and limited access to risk models and data. It sets out foundational steps such as building capacity to assess exposure and gaps, implementing risk-based and proportionate supervisory frameworks, improving financial literacy and risk awareness, and incentivising risk reduction through measures including disaster-resistant building codes and resilient infrastructure. It also points to insurance-based solutions including parametric insurance, microinsurance, and risk transfer mechanisms such as catastrophe bonds, reinsurance and regional risk pools, and identifies public-private insurance programs as a key delivery model. Building on the paper and as noted in the July G20 communiqué, the IAIS and the World Bank indicated they will continue work to provide practical guidance and tools to help policymakers and supervisors address NatCat protection gaps.