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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.

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 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).

Oxford Policy Management evaluated the African Risk Capacity (ARC), which provides sovereign and other insurance and builds capacity in member countries to respond to climate disasters. The evaluation, financed by the UK’s Foreign, Commonwealth and Development Office, and the Agence Française de Développement, looked at ARC’s work to grow insurance risk pools and strengthen country capacity to respond, as well as its longer-term sustainability. A detailed value for money analysis was also undertaken. It found that ARC has strengthened capacity to respond to drought through contingency planning and insurance in 17 out of 35 member states. Its support is widely valued by recipients. However, the distribution of support to beneficiary households by governments that received a payout often did not happen within the mandated time period, undermining its main objective. The capacity built often does not appear to be sustainable beyond ARC’s support. The value for money assessment rated economy and efficiency as adequate and adequate-to-good, respectively. It was rated less well on effectiveness and equity, due to the problems in reaching beneficiaries on time and challenges in government targeting processes. ARC’s drought insurance risk pool has grown considerably in recent years – due in a large part to subsidies on insurance premiums and a programme of parallel insurance for NGO networks. However, ARC is facing a significant financing and organisational challenges. A set of recommendations are made to address the evaluation findings.

Over the past decades, a suite of new Climate and Disaster Risk Finance and Insurance (CDRFI) tools has been generated across the development, the humanitarian and the private sector. Examples include index-based insurance, catastrophe bonds, forecast-based financing, pooled funds and many other innovations. Unfortunately, these innovative instruments have often been implemented largely in isolation of each other. Most of them are not integrated in comprehensive disaster risk financing strategies or linked more systematically to recent humanitarian efforts to scale anticipatory action (AA). They all serve different purposes, address different target groups and are based on different modalities – which has its advantages but also results in untapped potential, a loss of synergies, and risks leaving behind those who need the financing the most. In March 2021, the Anticipation Hub, the InsuResilience Global Partnership (IGP) and the Risk-Informed Early Action Partnership (REAP) teamed up to launch the “Sectoral Community on Linking Anticipatory Action to Risk Financing”. The objective of the Sectoral Community (SC) is to bring together the development & humanitarian sector, public & private actors, civil society actors, researchers and think tanks to exchange experiences and share ideas on how various CDRFI tools and anticipatory action can be better integrated. To deepen the discussions, the SC members came up with the idea to draft ‘think pieces’ – succinct, policy-relevant opinion pieces in which SC members could advocate for a particular position or objectively describe the issue/challenges and possible opportunities, options and solutions at hand. SC members developed a set of 10 questions, and they were then invited to address those questions based on their experience, technical expertise and further research. The think pieces are not necessarily providing the views of the organisations of the respective authors but their personal perspective. About every 4-6 weeks the SC gathered over the course of 2022 to discuss and refine the ideas coming out of the think pieces.

The 3rd edition of the Munich Climate Insurance Initiative (MCII) Annual Report is available. Download the report to learn about all MCII engagements and activities for the June 2021 – June 2022 period.