There is a growing global consensus that natural hazards are occurring more frequently and with increasing severity in all parts of the World. According to a report of the World Bank and the United Nations (2010: 169), it appears that the two powerful trends of rapidly-growing cities in the world and climate change may contribute to further change the profile of natural risks in the future.

The report estimates that there will be an increase in the number of people affected by earthquakes and cyclones from 680 million in 2000 to 1.5 billion by 2050 as a result of these trends. Besides cyclones and earthquakes, the report identifies droughts and flooding as the other two key natural hazards that will continue to have the most significant impact on people and property. One of the principal arguments from the report mentioned above is that while these nature-related risks or so-called “Acts of God” may be defined as “natural hazards”, their consequences should be more appropriately classified as “unnatural disasters”.

Following an international meeting on sustainable development initiatives of Small Island Developing States (SIDS) in Port Louis in January 2005, the United Nations adopted a plan-of-action known as the Mauritius Strategy for the Further Implementation of the Programme of Action for the Sustainable Development of Small Island Developing States.

According to a paper of the Indian Ocean Commission (IOC) on the ISLANDS Financial Protection Programme, it has been observed that the Indian Ocean region is facing an increasing number of destructive climate-related disasters (2015: 4). According to the IOC project document for the ISLANDS project, the total loss in infrastructure and agricultural investments from 1980 is a staggering US$ 17.2 billion.

Following the discussion on the need to create public disaster funds, it is worth noting that the existing insurance and reinsurance markets can play a critical role in this process. The insurance sector has a vast experience in risk management which could be used to support risk-related development projects in the African Indian Ocean Islands and other African markets. One of the major preoccupations of the industry is the very low awareness of risk despite the fact that risk affects everything we do.

In addition to the fundamental risks, the attention of the international community has also been drawn to a rapidly-growing threat of rising sea levels as a result of climate change. The African Indian Ocean Islands has shown leadership in Africa through the work that has been done in initiating the Islands natural disaster project. A number of critical steps have already been achieved and it is believed that the next key objective could be to explore options for risk mitigation through both physical risk control and financial risk control.