The InsuResilience Global Partnership supports a number of projects and programs related to climate and disaster risk finance and insurance across the globe. The ambitious goal of providing financial protection against climate and disaster risk for up to 500 million additional people by 2025 cannot be achieved by individual measures but requires a comprehensive strategy and a range of instruments and projects in different regions, as well as the expertise of different actors.
Therefore, the InsuResilience Global Partnership works towards comprehensive, risk-layered disaster risk finance strategies on a sovereign level, as well as on inclusive microinsurance schemes that foster resilience for households, enterprises and smallholder farmers against the effects of extreme weather events.
The initiative builds upon experience gained in Africa, Latin America and the Caribbean to expand existing and set up new risk finance instruments in vulnerable regions. The Partnership promotes the integration of these instruments into overarching climate policy and supports targeted measures to develop sustainable insurance markets in the vulnerable countries.
Direct insurance schemes are implemented on a micro level, insuring households and enterprises individually against risks such as harvest loss from flooding. Fast insurance payouts help to cover the losses of affected individuals and their families in the case of an extreme weather event.
In sovereign-level insurance schemes, governments or municipalities are insured, either by insurers directly or via intermediary risk pools. Individuals thus benefit indirectly, e.g. from rapid response to floods financed by insurance payouts, or from the timely reconstruction of infrastructure in affected regions. Insurance allows governments to avoid reallocating budgets and to provide faster and more cost-efficient support than humanitarian aid. Beyond insurance, other risk finance approaches exist that support countries with predictable financing on standby across a variety or risks, from high-frequency-low-severity events to low-frequency-high-severity-events. These approaches include contingent credit instruments and contingency reserves. Implementing partners under the Partnership support countries with technical and financial resources in designing risk finance strategies that build on a cost-effective mix of these tools.
Donors under the InsuResilience Global Partnership support various programmes, which do not offer insurance policies themselves but use financial resources, for example, to:
Support countries financially for the uptake of insurance solutions against extreme weather events
Provide technical assistance for the preparation and implementation of risk finance and insurance solutions, e.g. through the design of disaster risk finance strategies, risk modeling and assessment, or the development of insurance products that meet local resilience needs
Offer capacity building and education, e.g. to raise awareness for and enhance public knowledge of insurance instruments
The InsuResilience Global Partnership complements its engagement with supporting measures, to promote comprehensive climate risk management to increase the resilience of both states and individuals against climate risks. These include improving climate data and information systems, supporting contingency planning, and sharing knowledge on linking risk finance with broader resilience measures.
The InsuResilience Global Partnership has a unique focus on poor and vulnerable people in developing countries. Extreme weather events disproportionally 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. Access to financial protection can help them to escape this vicious cycle of poverty. It helps people to reduce their vulnerability and better manage their resources, as they can focus on useful activities rather than having to engage in risk-minimising activities.
This safeguards the livelihoods of many people who are at risk from the adverse effects of climate change.
Based on a study by the Munich Climate Insurance Initiative (MCII), the target group of the InsuResilience Global Partnership is defined as follows:
Extremely poor: people living on less than 1.9 USD PPP / day
Moderately poor: people living on 1.9 to 3.1 USD PPP / day
Vulnerable: people living on 3.1 to 15 USD PPP / day