The UN has issued a stark warning overnight to businesses operating in the Asia Pacific region that disaster could cost the region $160 billion per year by 2030.

Speaking at an event on financing disaster risk reduction, the United Nations development arm in the region warned greater innovation in disaster risk financing is desperately needed.

The need is all the more pressing given that only 8% of region’s losses are insured, said the UN Economic and Social Commission for Asia and the Pacific (ESCAP)

“The time for establishing solutions to these complex emerging challenges is now,” said Shamshad Akhtar, the Executive Secretary of ESCAP.

The low insurance coverage has persisted in the region even though it has suffered nearly $1.3 trillion in losses over the last 50 years.

The result is that individuals, businesses and Governments are left to bear the staggering costs of natural calamities. And with extreme weather events increasing as the region’s cities become more crowded, the gap could widen.

“Business, as usual, is unsustainable […] policymakers and financial strategists in both the public and private sectors have to work together,” said the head of ESCAP.

In her remarks, Akhtar outlined the opportunities offered by recent innovations such as catastrophe risk modelling, parametric insurance, a mix of traditional and global financial reinsurance, and concessional insurance.