Pension and Insurance Funds

August 31, 2022

An elderly man waits for the tram. Bosnia and Herzegovina.

An elderly man waits for the tram. Bosnia and Herzegovina. Photo: Flore de Préneuf / World Bank

Our work focuses on ensuring that more people have better access to quality pension and insurance products, and increasing the supply of institutional investors’ assets that can safely fund long-term investment.


Our objectives are twofold:

  • to ensure that more people have better access to quality insurance and pensions products
  • to increase the supply of institutional investors’ assets that can safely fund long-term investment.

Pensions - By 2050, the global population segment aged 65 and older will have doubled from 10% to 20%. Nearly 1.3 billion people – 80% of the elderly – will live in Low Income Countries (LICs). Yet, only around one-third of the population in these countries have any sort of formal retirement income. Pension systems contribute to the twin goals by providing income in the event of old age, disability and premature death of the primary beneficiaries. In addition, pension systems contribute to promote long-term savings and which in turn stimulates economic growth. They are also an increasingly important source of sustainable finance and leaders in greening our financial systems.

Insurance –The gap between uninsured and insured losses remains persistently large. Today there are important protection gaps in all segments of the population that are suffering from lack of sustainability. Such as old age income protection, health insurance for the aging population, basic livelihood protection for the poor, income protection for SMEs, and catastrophic protection including agriculture insurance, especially in areas prone to catastrophic exposure which by the way are permanently increasing. Which providers can cope with these challenges: demographic change (aging world) and climate change increasing the impact and frequency of catastrophic events in a sustainable way? Current forms of insurance, notwithstanding their importance, it is only one tool to close the protection gap and provide protection for people’s lives and their property. The challenge of finding new ways to reduce these gaps is critical for further developing the global inclusive economy. Innovative technology appears to offer solutions in the areas of underwriting, distribution, and claims adjustments, and regulation in many countries is encouraging the use of these technologies, such as Big Data, Artificial Intelligence, and Machine Learning. In addition, the concept of building back better should be adopted by the new insurance business models. Better insurance sectors in countries will not only aid to financial sector diversification but most importantly will help individuals, families, and organizations in expanding options for managing risks and investments. Insurance helps people and businesses protect themselves from shocks.  For instance, without insurance, individuals and families could become financially destitute and be forced to seek assistance from relatives, friends, or the government when they suffer a loss.

What we do

At the World Bank, we aim to reduce poverty and help poor and disadvantaged people.  Insurance protects people’s lives and property and helps to improve their lives.  Why many people around the world do not have insurance? Many do not know about insurance, cannot easily access insurance, cannot find suitable/tailored products, or cannot afford it.  Auto insurance tends to be highly competitive and affordable, but home insurance for example is expensive and rare.

The key areas of work described below have been priorities for us and deliver these tasks by conducting diagnostic reviews (including deep-dive country diagnostic studies), creating reform roadmaps, and supporting the implementation through a wide range of Technical Assistance projects – particularly directed to enhancing regulation and supervision – and advancing other specific market-driven initiatives.

  • Develop a resilient and sustainable insurance and reinsurance market to address all available risks in a country including climate change risks; What do we mean when we talk about the growth of insurance markets: It means that more people can buy insurance so they can protect themselves, their lives, and their property. Why is this important? It’s important because when misfortune strikes, then insured people are protected.
  • Support insurance regulators/supervisors to establish efficient and effective regulation: How it is possible to develop a strong insurance market so that more people buy the insurance and are protected?   Efficient and effective regulation is critical for a strong insurance market.  It’s not sufficient and, by itself, is not a guarantee for strong and deep insurance markets, but it’s a necessary requirement for a strong, functioning insurance market, without it markets simply fail to develop and grow.  
  • Digitization: Regulatory and Supervisory technology: Designing regulatory/supervisory technology.
  • Leading research: Our knowledge work aims to share international standards, emerging good practices, and innovative and tailored approaches to enable regulatory/supervisory framework to set up policyholders protection, increase transparency/disclosure, and risk management/transfer to close the protection gap.


Fiona Stewart

Lead Financial Sector Specialist