InsuResilience supports a number of projects and programs related to climate risk insurance across the globe. The ambitious goal of providing access to insurance for up to 400 million additional people by 2020 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, InsuResilience utilizes a combination of direct and indirect climate risk insurance schemes with funds and projects that foster resilience 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 insurance schemes in vulnerable regions. Furthermore, climate risk insurance arrangements are being integrated into both national and regional climate risk management strategies and supplemented by targeted measures to develop insurance markets in the above-mentioned regions.
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 indirect insurance schemes, governments or municipalities are insured, either by insurers or via risk pools. Indirect insurance can be implemented on a macro level, insuring national or local governments, and on a meso level, insuring cooperatives, micro-finance institutions, credit unions and NGOs, which use payouts to benefit individuals. Individuals thus benefit indirectly, e.g. from food distribution financed by insurance payouts following a drought, 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.
In addition, InsuResilience supports the development of insurance markets in partner countries and of sustainable climate risk insurance business models, which can be scaled up and replicated.
InsuResilience also supports different funds, which do not offer insurance policies themselves but use financial resources, for example, to:
Provide financing for insurance and re-insurance companies which offer insurance solutions against extreme weather events
Provide technical assistance for the preparation and implementation of insurance solutions, e.g. through feasibility studies
Offer capacity building and education, e.g. to raise awareness for and enhance public knowledge of insurance instruments
InsuResilience complements its engagement with supporting measures, to ensure 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 raising awareness of climate risk insurance solutions among affected populations and political and private stakeholders.
The InsuResilience Global Partnership has a unique focus on providing climate risk insurance for 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. Climate risk insurance 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-minimizing 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:
1. Extremely poor: people living on less than 1.9 USD PPP / day
2. Moderately poor: people living on 1.9 to 3.1 USD PPP / day
3. Vulnerable: people living on 3.1 to 15 USD PPP / day