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The year 2023 has been a notable year in the context of climate change. It has drawn attention to the reality of climate change through its record-breaking heat and severe weather events. These events painfully remind us that climate change is not a distant threat but today’s reality. The year’s unusually high temperatures and extreme weather events highlight the need for international efforts to address climate change, emphasizing the importance of integrated approaches of climate risk management strategies.

The CREWS 2022 Annual Report maps and illustrates how the Climate Risk Early Warning System (CREWS) initiative is making the world safer with early warning. It captures progress against key programme indicators since the initiative’s first projects. The CREWS initiative is a specialized fund for climate action that saves lives and livelihoods in Least Developed Countries (LDCs) and Small Island Developing States (SIDS). It helps countries and regions build strong and sustainable early warning systems providing timely, accurate and accessible climate risk and weather services to enable early action. Through tailored country-driven projects, the inititive strengthens national and regional institutions to better protect people hardest hit by climate change.

The InsuResilience Annual Report 2022 offers a concise overview of the milestones and highlights under the framework of the InsuResilience Global Partnership throughout the last year, especially the development and launch of the Global Shield against Climate Risks. You can find information on where the Partnership stands in reaching the targets defined under Vision 2025 in the “InsuResilience at a Glance” article. The current state of the Partnership’s collective ambition to scale Climate and Disaster Risk Finance and Insurance (CDRFI) in vulnerable countries encompasses 29 active programmes with 475 projects in 123 countries worldwide. Thanks to these efforts, 190 million people were financially protected through CDRFI solutions as per end of 2022.

The 2022 Climate Risk Insurance Annual Report of the World Food Programme (WFP) highlights key insights and achievements from WFP-supported Climate Risk Insurance (CRI) programmes. It provides deep dives into WFP-supported CRI programmes in each country, as well as stories from the field, interviews with partners, and insights into how WFP promotes gender equality and women’s empowerment in its programmes. In 2022, WFP provided financial protection to over 3.8 million people across 21 countries in Africa, Asia, Latin America and the Caribbean, through climate risk insurance instruments. In regions affected by droughts, floods, and hurricanes, these insurance products provided much-needed payouts to support 1.8 million people with a total of US$12.6 million.

For the United Nation’s World Food Programme (WFP), enabling access to Climate and Disaster Risk Financing and Insurance (CDRFI) solutions is central to fulfilling its mandate to achieve zero hunger through both saving and changing lives. WFP Nicaragua is leading the efforts in the Latin American and Caribbean region to implement a risk-layering insurance approach. A combination of financial instruments is being used to address hazards of varying intensities and frequencies as there is no “one-size-fits-all” formula for risk financing.

Despite the delays that the pandemic caused to the design and implementation of new products, three years after the launch of the first parametric insurance in Colombia, the Microinsurance Catastrophe Risk Organization (MiCRO) and its local partners have been able to provide almost 120,000 beneficiaries with increased protection against the impacts of hazards such as excess rain, drought and earthquakes. In 2019, MiCRO and SBS Seguros Colombia S.A. designed a microinsurance product for Small and Medium Enterprises (SMEs) in Colombia, which has since been offered to Bancamía’s clients and focuses on reaching the urban and rural poor.

Pastoralist communities, who rely on livestock for their livelihoods, are particularly vulnerable to extreme drought which is becoming more common due to climate change. Index-based Livestock Insurance (IBLI) has proven vital in these communities but has not appealed to women because in most cases men control the family’s livestock and the insurance payments for losses. Family Insurance is built on the technical foundation of IBLI but provides coverage in “family” units that pay for household needs during droughts that threaten families’ wellbeing.

The InsuResilience Solutions Fund’s (ISF) Annual Report 2022 highlights the activities and developments of the Fund throughout the past year. The ISF has made substantial progress in strengthening climate risk management, as well as Climate and Disaster Risk Finance and Insurance (CDRFI) architecture, globally. 2022 was a year marked simultaneously by large scale climate disasters, and groundbreaking global commitments towards addressing climate-related loss and damage. In this context, ISF made considerable progress in supporting climate risk insurance solutions to close the protection gap for vulnerable populations, recording a growing number of activities and reaching 49 projects in 27 countries to date. 2022 also marked the launch of the Global Risk Modelling Alliance (GRMA), and the start of its first project, which aims to develop climate risk modelling capabilities in Pakistan together with its Ministry of Climate Change.

The Sectoral Community (SC) on Integrated Resilience Approaches in Agriculture was developed to inform, design and test innovative integrated solutions in the agricultural sector, as well as support the development of funding criteria for such projects. Following a series of meetings and presentations the SC issued the following guidance for those designing projects and developing proposals for integrated resilience approaches in agriculture and those funding these projects. For project designers and developers, it is recommended to identify the resilience objectives and risk management activities, as well as cost-effective and complementary options. Furthermore, they should seek feedback from various stakeholders and build on existing evidence and best practices. The recommendations for funders include classifying the integration of various stages and processes as an investment objective, considering cost-effectiveness, enabling and incentivizing the use of sound economic risk modelling, and taking into account unintended consequences and tradeoffs. Funders should also pursue a principles-based approach when making investment decisions. Learn more about the InsuResilience Focus Topic on Integrated Approaches here.

In late 2020, the InsuResilience Integrated Approaches Working Group launched four sectoral communities (SC) to increase the deep-dive into topic-specific discussions. One of them focuses on linking Nature- based Solutions (NbS) and risk transfer instruments. Overall, this sectoral community seeks to share knowledge on NbS and Risk Financing, help explore and test new risk financing solutions and identify ways to further mainstream NbS and Risk Financing into global climate change adaptation and Disaster Risk Reduction agendas. The SC conducted a survey of how insurers employ NbS. The survey also indicated a lack of agreed assessment tools for the NbS benefits, with a majority of insurers relying on pilot studies rather than widely accepted methodologies. The SC agreed to host a workshop on March 2022 to explore this further and discuss how NbS can be better integrated in catastrophe models and insurance pricing to account for changing protection levels. The workshop was a key milestone for the SC and marked the transition from initial scoping (phase 1) to solution-oriented collaboration (phase 2).