This week, it was announced that ICMIF member the Folksam Group would be the sole investor in an SEK 1 billion (USD 93 million) bond issued by the World Bank which aims, among other things, to finance sustainable projects in developing countries with a focus on road safety. This is the first bond of its kind and it will, among other things, contribute to supporting projects to increase knowledge about road safety to prevent traffic injuries in developing countries. The bond will also contribute towards projects in emergency care and rehabilitation services for care after traffic accidents.
Road accidents are the dominant cause of death globally among children and young people. Every year, 1.3 million people die and 50 million are injured in preventable road accidents – a figure that the UN aims to halve by 2030. To achieve this goal, the World Bank estimated that funding of about USD 260 billion is needed and that private funds are needed to achieve it. Therefore, the World Bank has now issued this first sustainable development bond of its kind with the aim, among other things, of increasing knowledge about road safety and thereby preventing traffic accidents in developing countries.
Ylva Wessén, President and CEO of the Folksam Group and Vice-Chair of ICMIF said: “Road safety is a key issue for the Folksam Group. We have been conducting road safety research in Sweden for over 50 years and have long been involved in road safety issues. Now, together with the World Bank, we are taking another important step forward by highlighting that private capital can support investments in road safety. We also do it in a way that is beneficial in several respects – contributing to a more sustainable world by enabling necessary funding to projects on the ground level while providing safe and attractive investments on behalf of our clients.”
Jorge Familiar, Vice President and Treasurer at the World Bank said: “People in developing countries today pay the highest price as a consequence of lack of road safety, integrating road safety into all relevant World Bank activities will have a great positive impact. We are grateful to Folksam for supporting our business and highlighting road safety as a priority development area.”
In order to achieve the goal of halving the number of road deaths and injuries, the UN held a high-level meeting on global road safety in New York in the summer of 2022. Folksam’s CEO Ylva Wessén was invited to talk about how insurance and pension companies can contribute to the financing of global road safety projects. Folksam proposed that a traffic safety bond should be developed – which has now been done in collaboration with the World Bank.
The insurance and pension industry in Sweden manages around SEK 6,400 billion and in Europe around SEK 96,000 billion – capital that, through smart investments in, for example, roads and safer vehicles, would have a major effect globally. Folksam now hopes that this initiative can inspire innovation, creativity and new ways of thinking about financing road safety.
