InsuResilience Solutions Fund Supports Climate Risk Insurance for Family Farms in Serbia and North Macedonia
Serbia and North Macedonia, two Balkan countries situated in Southeast Europe, are strongly affected by extreme weather events. Over the last years, excess rainfall, long-lasting precipitation periods and snowmelt have caused unprecedented floods. In May 2014, Serbia suffered the heaviest rainfall and worst flooding since records began 120 years ago, causing losses above USD 2 billion. More recently, heatwaves, which led to a drop in agriculture output of nearly 10%, have underscored the threat of climate change in the region. Consequently, the awareness of climate risks and its negative impacts on the livelihoods of farming households has risen significantly.
With the Grant Agreement signed between the Frankfurt School of Finance and Management, as implementing agency of the InsuResilience Solutions Fund (ISF), and the joint partnership of Europa Re Ltd. and local partners, the ISF is actively supporting Serbia and North Macedonia to increase its capacities to cope and adapt to increasing climate risks. Within the project, ISF provides grants for co-funding the development of two different climate risk insurance schemes tailored to the individual needs of the two partner countries: a national and a municipal climate risk insurance scheme. The innovative insurance approaches to be developed with the support of ISF will help to increase the climate resilience of farmers and vulnerable families in rural areas of Serbia and Northern Macedonia.
Established in 2014 as a licensed Swiss reinsurer, Europa Reinsurance Facility Ltd. has been actively involved in the development of national catastrophe insurance markets in southeast Europe and Caucasus. To offer insurance protection to the unserved Europa Re is partnering with Globos Osiguranje, a national Serbian insurance company and the Ministry of Agriculture, Forestry and Water Economy (MAFWE) in North Macedonia.
In case of weather-related crop shortfalls and agricultural losses, the insurance product will provide compensation to a respective municipality in Serbia and the North Macedonian Ministry of Agriculture, thus enabling them to provide timely compensation to affected farmer households. These innovative climate risk insurance solutions represent an illustrative example for financing climate risks, thus contributing to the objective of the InsuResilience Global Partnership and its Vision 2025 to improve the resilience of poor and vulnerable people against the impacts of climate change and natural disasters.
The ISF was set up by KfW German Development Bank, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and is managed by the Frankfurt School of Finance and Management. As an implementing programme of the InsuResilience Global Partnership, the ISF supports innovative climate risk insurance solutions to mitigate the negative impacts of climate change. It offers co-funding and advice for the implementation of new climate risk insurance concepts into marketable products and the expansion of existing, sustainable climate risk insurance products. Under the condition that the applicants commit an own meaningful contribution of 50% of the requested funding, ISF provides grants of up to 2.5m EUR.
For more details about ISF´s offer, please refer to www.insuresilience-solutions-fund.org.
Contribution by the InsuResilience Solutions Funds.