Reports / Studies

Assessing the Value for Money of Premium and Capital Support towards Climate and Disaster Risk Finance and Insurance PRE-PRINT

In 2021, the InsuResilience Global Partnership (IGP) developed the ‘SMART Principles’ to guide the design and implementation of Premium and Capital Support (PCS) to support the scale-up of Climate and Disaster Risk Finance Insurance (CRDFI) solutions (Töpper and Stadtmüller, 2022). One of the 5 principles, ‘Value for Money’ requires that each dollar of PCS should ‘support needs-based CRDFI products that add value [… and requires the development of …] a clear assessment framework that makes improvements in resilience verifiable and comparable’ (ibid., p.8).
Value for Money, according to the principles, is defined as the ‘expected impact on poor and vulnerable countries’ and people’s resilience for each dollar of premium or capital support’. 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’ (ibid.).
This guidance note contributes to the practical implementation of the SMART Principles Value for Money approach. It does so by proposing a framework 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).

Topic / Theme:

Risk Finance

Solutions / Instruments:

SMART Premium and Capital Support

Year:

2022

Author:

J. Ward, L. Weingärtner and V. Panwar

Pages:

21

Language:

English

Organization:

InsuResilience Global Partnership