Closing the Protection Gap
The negative impact of climate change is expected to intensify in the coming decades. Thus, governments and societies need to prepare for natural disasters such as droughts, floods and storms in order to avoid the loss of lives and livelihoods. Insurance can play a critical role in effective disaster risk management by strengthening their resilience to climate change. Timely insurance payouts not only help people to recover faster but also render access to finance for transformative measures. Giving climate risk a price also incentivises adaptation measures, fosters risk reduction and avoids future damages ex-ante. However, especially in developing economies, the share of uninsured climate risk remains high. Thus our mission is to support vulnerable people and countries in the Global South to bounce back better in the face of climate and disaster risks through innovative climate risk insurance solutions.
Climate risk insurance products need to be well adapted to the needs of the poor and vulnerable populations but also represent a financially sustainable product in order to reach scale and secure replicability. We, therefore, seek to closely involve the insurance industry. On the one hand, to leverage its expertise and know-how in the development of new and innovative climate risk insurance solutions. On the other hand, to integrate its capital in form of insurance coverage for the solutions to be developed. By doing so, we foster public-private partnerships to actively strengthen the case for the insurability of climate risks.
Developing Climate Risk Insurance Products
We support and promote the joint product development and implementation of innovative climate risk insurance products. We provide grant-based co-funding to joined partnerships where at least one partner is:
- representing the demand and needs of end-beneficiaries (e.g. national or regional government bodies, NGOs, local insurers),
- willing to act as a risk taker (e.g. reinsurance company), and
- located (i.e. officially registered) in a developing or emerging economy.
Partnerships are invited to apply for co-funding submitting proposals for the development of climate risk insurance products in specific Call for Proposals.
Since 2019, we launched four Calls for Proposals that generated high interest. We received and evaluated over 120 applications for co-financing the product development of innovative climate risk insurance solutions.
We are currently supporting projects on macro, meso, and micro level in South Africa, Serbia, North Macedonia, Colombia, Peru, Bangladesh and Ghana.
Large-scale smallholder farm drought insurance in South Africa
Land Bank Insurance Company Limited, CelsiusPro
Climate risk insurance for family farms in Serbia
Globos Osiguranje, Europa Re
Climate risk insurance for family farms in North Macedonia
Ministry of Agriculture, Forestry and Water Economy (MAFWE), Europa Re
Boosting Agriculture Risk Mitigation in Bangladesh through Climate Insurance for Smallholders
Syngenta Foundation for Sustainable Agriculture, BRAC, Green Delta Insurance Company Limited
Closing the protection gap for Peruvian public schools
APESEG, AXA XL, Munich Re, Insurance Development Forum (IDF), Picsure, GEM Foundation, JBA Risk Management
Resilient and empowered SMEs and smallholder farmers in Colombia
Microinsurance Catastrophe Risk Organization (MiCRO), SBS Colombia S.A., Bancamia
Climate risk insurance for smallholder farmers in Tanzania
drought, flood, plant disease
Pula, Reliance Insurance Tanzania
Increasing smallholder farmer resilience to climate change through technology and innovation in climate risk insurance products and distribution channels in Ghana
Drought, flood, plant disease
Pula, Ghana Agricultural Insurance Pool (GAIP)