The United Nations Development Programme (UNDP) and Milliman Inc. laucnhed today a new initiative to build actuarial expertise in developping countries, helping predict and prepare for risks in these uncertain times.
The UNDP-Milliman Global Actuarial Initiative, announced on the sidelines of the 77th United Nations General Assembly, will seek to enable insurers, pension funds and social security administrations to better manage risks and in turn offer innovative and affordable insurance solutions for all.
Milliman, the largest provider of actuarial services to the global insurance industry, will provide UNDP with as much as US$2 million per year in pro bono services to build developing country governments capacity in analytical techniques of risk management, until the end of 2025.
“Protection from risks is the only way out of a world of deepening inequalities and compounding crises. Developing countries, who are contending with significant debt, shrinking fiscal space and mounting risks from the pandemic and climate change, need the right tools and capacities to predict and plan for their citizens. When insurers and institutions are better prepared for risks, they can ensure no one is left behind. Making long-term insurance accessible and affordable for the most vulnerable populations has to be an imperative, not an option,” said UNDP Administrator Achim Steiner, adding “our collaboration with Milliman should generate the expertise necessary to support insurers and regulators as they look to effectively address these risks.”
Many developing countries lack actuarial capacities – assessing risk in insurance and finance with mathematical and statistical methods – and are to seize on the opportunities to set up effective insurance and risk transfer solutions that can benefit the most vulnerable. In addition, in most developing countries there is a severe lack of data, especially with regards to people at risk. This combination of limited actuarial expertise and data leads to mispriced insurance products that typically are not affordable for the majority, providing little value for much of the population.
With Milliman, UNDP, through its Insurance and Risk Finance Facility, will back a better functioning of insurance markets and risk management and help to price risk-responsive and inclusive insurance. In turn, affordable insurance solutions can be developed for poor and vulnerable people which supports global South countries to build financial resilience, protecting development gains and sustaining better lives. Insurance and risk transfer not only protect people and communities from the adverse impact of crises but can stimulate and incentivize growth by stripping away uncertainty and risk from society as they allow both families and governments to invest more than they would otherwise, safe in the knowledge that critical assets and livelihoods are protected.
Ken Mungan, Chairman of the Board of Milliman said: “Working jointly with UNDP, Milliman will contribute to the growth of actuarial expertise and help countries and the insurance industry to better manage the increasing risks faced by people and enterprises in developing countries.”
Starting with a group of countries in 2022, including Colombia, Egypt, Nigeria, and Nepal, the UNDP-Milliman Global Actuarial Initiative will build improved capacity in actuarial skills and risk modelling through UNDP Country Offices to roll out the programme at country level. The actuarial situation in each country will be assessed and a roadmap will be developed with local stakeholders, including regulators, central banks, universities, insurers, actuarial organizations and associations to address identified gaps and opportunities. Based on the roadmap, interventions will be coordinated at country level.
(Source: UNDP News -18 September 2022)
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