Developing countries could ease natural catastrophe losses by up to 90% through better application of insurance models, a new Swiss Re report claims.

The report, released last week ahead of Climate Week being held in New York, discusses the difficulties and possible solutions to finding adequate risk cover in developing nations.

Swiss Re Division Head Property & Specialty Matthias Weber says extending cover to poor communities is often hampered by the lack of an advanced local market. However, unique solutions involving the private and public sector are emerging to fill the void.

Mr Weber cites the Caribbean Catastrophe Risk Insurance Facility as an example of a creative solution in a location that be otherwise be unable to fund traditional forms of insurance.

Developing nations are most at risk from climate change, he says.

“Insurance is an effective method to finance the costs of climate-related disasters. It is most effective when viewed as an integral part of a much broader climate adaptation strategy.”

The report says climate change could exacerbate the impact of natural disasters, which will cost some countries up to 19% of their annual GDP by 2030.