“Insuring” Impact: International Financial Institutions and Insurance Partnerships for Development

The world is grappling with an unprecedented number of crises. Often interconnected, they are growing more frequent and severe, yet how we manage risk and finance efforts to build resilience has not kept pace.

The lingering effects of the COVID-19 pandemic, compounded by conflicts, geopolitical volatility, and persistent natural disasters, are conspiring to slow global growth and add to pressure on already fragile economies. The result is visible: 2025 has been described as "the worst humanitarian year on record."

Against this backdrop, efforts to strengthen financial stability, particularly in emerging markets, could use a boost.

International financial institutions (IFIs) such as the World Bank and the International Monetary Fund already play a central role in helping countries tackle development challenges. Initiatives like the International Development Association and the Poverty Reduction and Growth Trust provide essential financial support that helps make meaningful development possible and improve people's lives.

To increase impact, however, IFIs need stronger partnerships with the private sector. The insurance industry is well positioned to contribute. Insurers bring expertise in risk data solutions, risk management, structuring, and capital that can help countries better prepare for and respond to shocks.

Through initiatives such as the World Bank’s Private Sector Development Lab, insurers including Prudential and AXA are contributing insights on how more coordinated approaches can accelerate private-sector investment in emerging markets.

Already, there are strong examples of what works.

In Nigeria, an Open Geospatial Data Initiative supported by the World Bank and the United Kingdom helped insurers assess flood risk across 1,200 zones more accurately, which reduced premiums. In the Horn of Africa, Swiss Re and others worked with Zep Re and the World Bank to implement a public-private partnership that provides affordable, commercially viable access to insurance to cover 1.6 million pastoralists in Ethiopia, Djibouti, Kenya, and Somalia. These projects show collaboration between IFIs and insurers can deliver tangible results at scale.

Despite this progress, important gaps remain. Insurance companies bring strong capabilities in risk analytics, regulatory engagement, and capital mobilization, but their value is not always well understood across the multilateral system. Open exchanges that focus on where our industry can step in to assist development projects can help remedy this.

There are also practical challenges in how projects are implemented. For instance, our vision is to embed private-sector insurance capabilities into multilateral instruments themselves. However, insurers are often brought in too late in the process. Engaging them earlier, including at the design stage, would improve risk assessment and support more sustainable solutions over time. This includes embedding risk thinking into country strategies, infrastructure planning, and programs to address climate-related risks.

There also should be greater focus on moving beyond post-disaster financing toward proactive approaches where public funding, concessional capital, and private insurance capacity are combined to create solutions before threats materialize. As convenors, IFIs are well placed to bring governments, regulators, and insurers together to support solutions such as parametric and sovereign risk insurance.

At the same time, we should scale up what already works. Successful solutions and partnerships can be expanded and replicated across markets, building momentum behind development efforts that have a broader impact. Demonstrating tangible results inevitably builds confidence among stakeholders. Put simply, seeing is believing.  

It is equally important to embed insurance solutions within existing systems, such as by integrating risk coverage into lending structures or public financing frameworks. In many emerging markets, functioning mechanisms and distribution channels already exist. Building on these structures, rather than creating new ones, can improve efficiency, accelerate adoption, and help navigate regulatory complexity.

The Bretton Woods Committee has launched a new Private Sector Development Finance initiative that aims to strengthen collaboration between IFIs and the insurance industry and identify practical ways to amplify the positive effects of development. This effort will also explore how partnerships with other private-sector actors, supported by innovative technologies, can further advance global growth and financial stability.

The complexity of our global challenges isn’t going away. Given this reality, deeper collaboration between IFIs and the private sector—with an expanded role for the insurance industry—offers a practical and scalable path to strengthening resilience and supporting sustainable development in vulnerable and developing economies.

A version of this article was initially published by the Bretton Woods Committee, a non-profit organization dedicated to effective global economic and financial cooperation. Swiss Re is an organizational member of the BWC.