Applying a Gender Lens to Climate Risk Finance and Insurance

The latest Intergovernmental Panel on Climate Change (IPCC) report highlights the urgency of immediate action to prevent the temperatures exceeding 1.5°C. The scale of existing climate change-induced disasters is set to worsen, which requires new adaptation and resilience strategies to help the most vulnerable communities cope.

International climate change experts and frameworks recognize that women and men face different climate change vulnerabilities, risks, and impacts based on their gender. Women are disproportionately represented among the poorest and most vulnerable populations that suffer the most significant impacts. This is acknowledged in the ‘Gender Action Plan (GAP),’ adopted at COP 23, which calls for a gender-sensitive approach to mitigation actions and adaptive responses. This includes promoting gender-sensitive climate risk insurance, which acknowledges gender differential vulnerabilities to climate change and patterns of access and usage of financial services between men and women due to social norms.

Given this context, there is a clear case for the InsuResilience Global Partnership to focus on the gender dimensions. Therefore, the InsuResilience Secretariat has commissioned this paper to explore the link between gender and climate and disaster risk finance and insurance (with a particular focus on climate risk insurance) and provide recommendations for the Partnership.

The Gender Context

Women are more vulnerable to the impacts of climate change with implications for their mortality, morbidity and adaptive capacity. This is due to social norms such as their levels of economic participation, role in agriculture, unpaid care responsibilities, and access to information, as well as their biological differences due to their childbearing role. Women’s vulnerability to climate change has implications for their risk profile, protection needs and preferences, and barriers to access and use of climate risk insurance.

An Emerging Market Opportunity

Women constitute a receptive client base for climate risk insurance. Access to climate risk insurance can help increase their ability to mitigate climate risks and effectively manage shocks. While the specific market potential is unknown, there is a growing female market opportunity in inclusive insurance. Increasing women’s protection will require deliberate strategies by diverse climate risk insurance providers.

The Policy Context

There are three major policy entry-points to the topic of gender-sensitive climate risk insurance, which converge to the UN Sustainable Development Goals:

  1. International disaster risk reduction (DRR) policy focuses on women’s leadership and role in disaster planning and recognizes the influence of gender in disaster vulnerability. The Sendai Framework for Disaster Risk Reduction incorporates gender-sensitive approaches.
  2. The international climate change policy frameworks including the UNFCCC, the Kyoto Protocol and the Paris Agreement, recognise the links between gender and climate change and call for gender responsiveness in climate change planning, policy-making and implementation guided by a Gender Action Plan (GAP).
  3. Inclusive finance and insurance policy is slowly integrating a focus on climate risk insurance. Global financial sector policymakers and regulators have prioritized closing the financial inclusion gender gap in the Alliance for Financial Inclusion Denarau Action Plan.

Integrating Gender into Climate Risk Insurance Models – a Stocktake

Gender-sensitive insurance mechanisms play a key role in gender equitable disaster risk management strategies. A light stocktake of existing models of climate risk insurance at a macro, meso and micro level provides first insights into gender-sensitive approaches at each of these levels. These include:

Macro level:    E.g. Gender-specific impact data

Meso level:     E.g. Product design focused on women’s crops

Micro level:    E.g. Sensitization of women beneficiaries

Key Findings and Recommendations

Gender is relevant to all aspects of climate risk responses. As such, there is a clear case for the InsuResilience Global Partnership to consider the gender dimensions in order to deliver on its vision. The InsuResilience Global Partnership can take the following recommended short-term actions:

  • Commission a detailed analytical study and a series of case studies on climate and disaster risk finance and insurance and gender, and create a dissemination plan to share the results.
  • Create a Partnership commitment or statement on gender and accompanying action plan for all members of the Partnership.
  • Establish a Working Group on gender to develop a gender approach within the Partnership framework and integrate gender within the Pro-Poor Principles of the Partnership.

Over the medium term, it is recommended that the Partnership:

  • Promotes the collection, analysis and use of sex-disaggregated data on climate and disaster risk finance and insurance.
  • Engages at a global and national level with stakeholders to promote policy coherence and sex-disaggregated data on climate and disaster risk finance and insurance and develop capacity building initiatives.
  • Furthers the academic gender and climate and disaster risk finance research agenda in the framework of existing research initiatives.
  • Promotes funding (e.g. under the Global Risk Financing Facility (GRiF) or other programmes) to encourage the targeting of women clients.
  • Supports the participation of women working in climate and disaster risk finance and insurance in relevant leadership training initiatives.

The full study ‘Applying a gender Lens to Climate Risk Finance and Insurance’ can be found here.