The InsuResilience Solutions Fund: Advancing Innovative Climate-Risk
The InsuResilience Solutions Fund (ISF) is administered by the German Development Bank (KfW) and funded by the Federal Ministry of Economic Cooperation and Development (BMZ). The aim of the fund is to catalyse joint initiatives between national public entities and the private insurance sector. In the fund’s first year of full operation, it already became evident that there is a high level of demand for support and advice relating to the transformation of climate risk insurance concepts into products ready for market placement and the scale-up of successfully piloted products.
2019 was a key year for the ISF since the programme became fully operational and provided financial support for the development of climate risk insurance products. This increased the resilience of poor and vulnerable households against the impacts of climate change. In order to adapt the programme to the needs of partners and the private sector, procedures were adjusted and adapted in an initial piloting phase of the InsuResilience Solutions Fund, and the scope of the programme was finalized. In January 2019, the ISF was set up as an external entity with the Frankfurt School of Finance & Management (FS) acting as an implementing partner to manage the fund and support its research activities.
In 2019, the InsuResilience Solutions Fund launched two Calls for Proposals that generated a great deal of interest. Joint partnerships of demand and supply-side representatives submitted more than 60 Concept Notes. The ISF envisages two further Calls for Proposals in 2020.
Ensuring sustainability through research and knowledge sharing
The InsuResilience Solutions Fund has a unique approach in supporting joint initiatives by local partners, companies in the insurance sector and NGOs in an effort to leverage the expertise of the insurance sector. The aim is to promote the demand and ensure the sustainability of the climate-risk insurance products that are developed. The Frankfurt School of Finance & Management will complement the support of the ISF in order to ensure long-term access and development of local markets for climate risk insurance products. This will be achieved by enhancing research and knowledge sharing within its educational programmes and study modules over the course of 2020.
The Frankfurt School of Finance & Management cooperates with other partners from research and academia to carry out analysis and research. It forms an additional pillar within the scope of activities carried out by the InsuResilience Solutions Fund. Comprehensive climate risk analysis is an essential element of climate risk management. This analysis enables governments, businesses and households to become more proactive risk managers and to define needs-based climate risk management and adaptation strategies. Funding of comprehensive climate risk analysis, such as studies related to the Economics of Climate Adaptation for selected geographical areas will be available through the ISF. The Strategic Committee of the InsuResilience Solutions Fund approved the first studies on the economics of adaptation to be conducted for partners in Ethiopia and Honduras with initial kick-off workshops being held in November and December 2019.
After 2019, the InsuResilience Solutions Fund will seek to advance mobilization of private capital, build partnerships and reach out to key partners and donors in order to up-scale funding and broaden the range of innovative climate-risk insurance solutions. These efforts are directed towards eventually providing improved cover for those affected by climate and natural disasters. The InsuResilience Solutions Fund: Advancing Innovative Climate-Risk Insurance Products
Contribution by Annette Detken And Lena Laux (Insuresilience Solutions Fund)