Frequently Asked Questions

Learn more about the InsuResilience Global Partnership and have your questions about climate and disaster risk finance and insurance answered.

What is the InsuResilience Global Partnership?

The InsuResilience Global Partnership is a platform for inclusive, integrated collaboration, shared learning and delivery on climate and disaster risk finance and insurance solutions. It brings together V20 and G20 countries, donors, private sector, international organisations and the civil society. Together, all members and partners envision to protect the lives and livelihoods of poor and vulnerable people against the impacts of disasters and to make developing countries more resilient to climate risks.

What are the benefits of disaster risk finance and insurance mechanisms versus international aid?

Compared to humanitarian assistance, financing tools like sovereign risk transfer solutions can provide faster, timelier, more cost-effective, and more reliable responses to disasters. Index-insurance pay-out, for instance, will be automatically triggered as soon as an event passes the pre-determined trigger threshold. Rapid pay-outs and prompt assistance to affected populations can reduce the impact of disasters, protecting lives, livelihoods, infrastructure, businesses and public finance, and enabling poor and vulnerable people to recover more quickly.

Without coverage by insurance and risk financing solutions, people affected by a disaster may resort to negative coping strategies that put them at risk to fall back into poverty while awaiting humanitarian assistance. An additional advantage of insurance and risk finance is that they can unlock economic development by acting as a security net for the insured, thereby providing incentives to invest more in their insured assets during non-pay-out periods. Furthermore, risk financing instruments can encourage governments to become proactive risk managers: by putting a price tag on risk they can strengthen anticipatory capacities and foster efforts to manage risks.

For whom and when do risk finance instruments make sense?

The main premise of insurance and other risk transfer instruments is to provide liquidity in the event of a loss that could not be planned for. As climate and disaster risks and vulnerability exposure vary between countries and regions, different approaches are required. A disaster risk management analysis can help to determine the most suitable solutions for a specific region and peril.

Depending on the frequency and the severity of an extreme weather event, risk financing instruments with different characteristics are available: Climate risk insurance, for example, makes most sense for exceptional circumstances that occur with low frequency but high severity of disasters, as it would be too costly to cover for regularly occurring disasters. On a national level, instruments such as contingency funds may be more appropriate for recurring disasters with less severe economic impact.

Importantly, risk financing solutions cannot compensate for all negative impacts of extreme weather events, nor are they suitable on a stand-alone basis. To maximize impact, it is key to consider sequencing, timing and combining of different disaster risk financing instruments (“risk layering”) with disaster risk management measures and embed it in a comprehensive climate and disaster risk management approach to prevent, avoid and mitigate losses.

Why does the Partnership target poor and vulnerable?

Extreme weather events disproportionately harm the poorest: in proportion to income, poor people lose more assets than non-poor, while possessing fewer resources and capacities to cope. Therefore, they are at high risk of falling back into or being trapped in poverty in the aftermath of extreme weather events. The InsuResilience Global Partnership therefore promotes the development and implementation of solutions targeted at poor and vulnerable. Based on a study by the Munich Climate Insurance Initiative (MCII), the target group of the InsuResilience Global Partnership is defined as:

  1. Extreme poor: people living on less than 1.9 USD PPP / day
  2. Moderate poor: people living on 1.9 to 3.1 USD PPP / day
  3. Vulnerable: people living on 3.1 to 15 USD PPP / day who are particularly exposed to climate risks and at high risk of slipping (back) into poverty due to climate change-related extreme events

To ensure that the poor and vulnerable to the effects of climate change are reached, a set of Pro-poor Principles have been created to inform, inspire and motivate all actors in their objectives to deliver climate and disaster risk financing and insurance solutions to this target group.

Why join the InsuResilience Global Partnership?

Members of the InsuResilience Global Partnership take part in shaping a growing community on building financial protection to disasters. This entails access to knowledge, expertise and services, and a contribution to shaping future policy, practice and investments.

Working through the Partnership’s Program Alliance partners, governments can pursue customized training and assistance to identify cost-effective financial mechanisms for their countries. International development partners can work together to meet strategic development priorities. Civil society can engage with stakeholders on all levels and help to promote best practice; while the private sector can test the usability of existing insurance solutions, shape product innovation, and support market development.

How to become a member of the InsuResilience Global Partnership?

The Partnership is inclusive and open to stakeholders aligned to the vision of the Partnership. Countries and organisations that share the vision and contribute to the objectives of the Partnership can request membership. The Partnership relies on core members (i.e. countries, multilateral institutions) and supporting members (i.e. private sector entities, non-governmental organizations, research institutions, implementing partners). Members can sign up to become a member by endorsing the Concept Note via a statement of a senior high-level representative of their institution / organisation. Membership is not bound to a fee but input in form of active contribution to the Partnership, e.g. by engaging in one of our working groups, is expected.