“We can’t keep relying on government and charities to find more money – there is far more private capital available than public – and there is huge appetite from this capital to invest in ESG, but it needs a market,” Howden said. “So, I’m here today to ask for your help in creating that market.”
According to a new report by Howden Group, the humanitarian funding gap has risen from less than $1 billion two decades ago, to $4 billion a decade ago, to over $20 billion at present.
“The shortfall isn’t just a funding gap – it is lives and livelihoods,” Howden explained to the panel. “It is the difference between the 235 million people who need humanitarian support and the 160 million people that humanitarian organizations can currently afford to reach.”
To close the protection gap, Howden turned to the success of catastrophe bonds as a way to pool private capital for scaling up insurance solutions in humanitarian projects.
He cited the world’s first catastrophe bond for volcanic eruptions – a partnership between Howden Group and the Danish Red Cross – as a strong model for other kinds of disaster relief projects. The volcano bond has a multiplier effect that would compensate up to 20 times the premium.
Part of its funding came from the Howden Group foundation that now holds £100 million worth of financial relief for global projects.
“The real power of insurance lies not only in its underwriting and risk modeling capabilities, but its ability to attract and mobilize capital,” Howden said.