The National Confederation of Insurers (CNseg) signed a cooperation agreement with ICLEI (acronym for the NGO Local Governments for Sustainability) to develop new insurance for urban infrastructures in the event of climate disasters.
The agreement was signed during COP28, in Dubai, in the United Arab Emirates, by the president of CNseg, Dyogo Oliveira, and the executive secretary of ICLEI South America, Rodrigo Perpétuo.
Oliveira told CNN that this insurance will cover “damage caused to municipal infrastructure such as roads, streets, bridges, schools and hospitals that are affected by climate events”.
According to him, this type of coverage already exists in other countries, but it is unprecedented in Brazil. Therefore, it is important to have an agreement with ICLEi, a global association of local and subnational governments dedicated to sustainable development.
“We closed the agreement with ICLEI to develop all the technical part, all the regulatory part and to offer training for insurance company teams, so that insurance companies can start offering this product quickly”, said the president of CNSeg.
Dyogo Oliveira also said that “this agreement will offer the first cities that will participate in this product development and discussion process, a grant, a subsidy, from KfW, Germany’s development bank. As a result, these first cities will have their insurance costs reduced with this contribution from the bank.”
Oliveira recalls that this “is a relevant product as 1,700 Brazilian municipalities have had climate incidents in the last 10 years. And the municipality, when it has this type of problem, does not have the budget to recover that affected region. It depends on transfers from the state or federal government. Then implementing this takes a long time, because it depends on public purchasing tenders, an entire administrative process that takes time. This type of insurance gives you much more flexibility. The recovery will be much faster and with much better quality.”
The agreement, called the “Insurance Mechanism for Urban Infrastructures”, aims to facilitate decision-making in disaster risk management in locations affected by a meteorological incident, in addition to strengthening the financial resilience of cities to disasters.
The National Confederation of General Insurance, Private Pension and Life, Supplementary Health and Capitalization Companies (CNseg) brings together the companies that make up the sector, gathered in its four Federations (FenSeg, FenaPrevi, FenaSaúde and FenaCap).
Source: CNN Brasil
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