Public-private insurance programmes must evolve beyond their traditional role as post-disaster payout mechanisms, according to a new report from the Geneva Association.
The study argues that these programmes should instead function as tools for building long-term resilience.
The report examined 14 existing schemes, including France's Caisse Centrale de Réassurance, the UK's Flood Re, Spain's Consorcio de Compensación de Seguros (CCS), the US National Flood Insurance Program (NFIP), the Australian Reinsurance Pool Corporation (ARPC), and Japan Earthquake Reinsurance.
While many programmes have stabilised markets or expanded coverage, persistent challenges remain. These include heavy financial liabilities, the displacement of private-sector participants, and insufficient incentives for risk reduction.
Several major schemes are showing signs of stress. The US NFIP carries US$22.53 billion in debt, with US$2 billion stemming from losses related to Hurricanes Helene and Milton. France's CCR experienced a seventh consecutive year of losses, recording an €80 million shortfall in fiscal year 2023, a Carnegie Endowment study found.
Spain's CCS has proved more resilient. Fitch Ratings data shows the programme disbursed €10.6 billion in compensation for extraordinary risks from 1987 to 2022, with approximately 70% of payouts linked to flood-related events.
The report comes as uninsured losses continue to mount globally. Swiss Re's sigma report found that only 43%, or US$137 billion, of the US$318 billion in global economic losses in 2024 were covered by insurance.
Aon's 2025 Climate and Catastrophe Insight report put the figure higher, estimating US$223 billion in uninsured losses for 2024 – a gap of 60%.
Regional disparities remain stark. Asia's protection gap has reached 82.8%, followed by Latin America at 81.0%. North America's gap stands at 43.2% despite frequent severe weather events.
An Economist Impact and SAS survey estimates the global protection gap across life, health, natural catastrophe, and crop insurance at approximately US$1.8 trillion.
The Geneva Association outlined a three-pillar framework for narrowing protection gaps: investing in risk reduction, strengthening private insurance markets, and deploying public-private programmes as targeted risk-sharing mechanisms.
Managing director Jad Ariss (pictured above) said the programmes need to take on a more active role. "To remain viable in a world of escalating risks, they must become resilience engines – reinforcing prevention, strengthening incentives to reduce exposure, and helping societies recover faster with less pressure on public budgets," he said.
Hélène Schernberg, director of public policy and regulation, noted the complexity involved in establishing such programmes.
She said policymakers must substantiate the protection gap, exhaust risk-reduction measures, define which exposures warrant intervention, and make "an explicit fiscal case for the residual risk the state is willing to absorb."
