The recent hurricanes and flooding in the Caribbean have demonstrated once again that poor communities are disproportionately affected by natural catastrophes. An international conference to be held in Zurich on Thursday 21 October aims to show how the insurance industry can play a crucial role in finding solutions to the challenges of disaster risk management in the developing world.

The one-day conference, 'The Potential of Insurance for Disaster Risk Management in Developing Countries', is being organised by the ProVention Consortium, a global partnership launched by the World Bank and now hosted by the International Federation of Red Cross and Red Crescent Societies in Geneva. ProVention is dedicated to reducing the risks and impact of natural disasters.

Disasters are becoming more frequent and more severe, a trend fuelled by unplanned urbanisation, rapid population growth and climate change. All too often it is the poor and marginalised who are hardest hit. According to Munich Re, since 1980, 60 per cent of economic losses associated with natural disasters and 95 per cent of insurance payouts occurred in rich industrialised nations. Yet 80 per cent of fatalities happened in the least developed countries.

"The Red Cross and Red Crescent see the increasing social cost of disasters, in terms of lost lives, destroyed livelihoods and setbacks to human development," says Eva von Oelreich, Head of Disaster Management at the International Federation's secretariat in Geneva . "Insurance provides a proven mechanism for transferring risk, and as such can play a developmental role by mitigating disasters and reducing the impact and cost on the lives of the poor. We cannot act alone and it is essential that we involve the private sector in international disaster reduction efforts, by engaging their expertise and interest in global risk management."

The conference hopes to demonstrate that disaster risk reduction through financial tools in developing countries is not simply an exercise in corporate social responsibility. It also makes sound business sense to develop sustainable business practices in new markets, especially emerging - though disaster-prone - ones like China and India .

The conference, which brings together around 80 leading policy makers and practitioners from the business, development and disaster reduction communities, will look at a variety of topics, including catastrophe pools, micro-insurance schemes, famine risk insurance, public-private partnerships and the challenge of linking local and global initiatives.

"The challenge this conference seeks to address is how to develop sustainable insurance and risk transfer schemes in disaster-prone developing countries that are accessible to those considered 'uninsurable'. Recent initiatives have shown that it is possible to devise mechanisms that are flexible enough to meet this need, and the interest from the insurance sector demonstrates that the will is there," says ProVention manager, David Peppiatt.