Methodological guidance to assess the value for money of premium and capital support towards climate and disaster risk finance and insurance

In 2021, the InsuResilience Global Partnership developed a set of SMART Principles for the purposes of guiding the design and implementation of appropriate premium and capital support (PCS) that could help scale up climate and disaster risk finance and insurance (CDRFI). One of the five principles, ‘Value for Money’ (VfM) describes the impact each dollar of premium and capital support has on the resilience of poor and vulnerable countries and people. The principles also highlight that the value proposition of PCS should include crowding-in, rather than undermining, private capital, ‘recognizing the key role that effective private insurance markets can play in resilience-building of developing economies’.

This guidance note contributes to the practical implementation of the VfM principle. It does so by proposing a framework and methodology for the ex-ante assessment and comparison of different PCS options, aiming to inform and support decision-makers. The guidance note is based on, and aligned with, the SMART Principles, the IGP’s monitoring and evaluation framework (IGP, 2021), and IGP pro poor principles (IGP, 2019).