The core objective is to support insurance companies in providing affordable and sustainable insurance products to households and companies in rural areas to protect them against losses from extreme weather events.
Climate Insurance
Welcome to the "Climate Insurance" database, a joint project between the Global Index Insurance Facility (GIIF), Munich Climate Insurance Initiative (MCII), and the German Corporation for International Cooperation GmbH (Deutsche Gesellschaft für Internationale Zusammenarbeit, GIZ), commissioned by the German Ministry for the Environment, Nature Conservation, Building and Nuclear Safety. This database shares the experiences of numerous international organizations in the field of risk transfer and insurance solutions to climate risk management. Its main objective is to share best practices and innovative solutions to contribute to successful and sustainable climate risk insurance projects in climate-vulnerable countries.
On this database, users can find factsheets, InFocus, videos, and reports which they can filter by type, topic, country, region, or organization. The factsheets show the experiences of international organizations with relevant projects on climate risk insurance to identify lessons-learned, challenges, best practices and innovative solutions. The InFocus identifies and focuses on one technical topic within a climate risk insurance project and pinpoints the barriers, necessary steps, remedial actions, and overall recommendations. The videos and reports give more in-depth information on specific aspects of climate risk insurance.
If you are interested in sharing your knowledge on the Climate Insurance database, please contact mcii@ehs.unu.edu.
** What are factsheets and InFocus documents in this section?
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This project will develop climate risk management systems, best practices, and insurance products that will shield smallholder farmers and businesses engaged in producing coffee, sugar, rice, cassava, rubber, dairy, and grazing across the agricultural value chain in key SE Asia countries from physical and financial disaster associated with climate change.
The core objective is to provide better information on rice crop growth for food security policy and to reduce the vulnerability of smallholders in rice production caused by natural catastrophes.
The overall aim of the project is to strengthen resilience against disruptive weather phenomena and climate change at the national, regional and local level in three partner countries: Tanzania, Peru, India.
The overall aim of the project is to co-develop new catastrophe risk models for floods in the Philippines and cyclone in Bangladesh, and to quantify the impacts of climate change on flood risk, to support risk management decisions and risk-based financing.
Peru has a risk transfer system for the agricultural sector financed by the state and the private sector, including insurances against climate risks.
Over the past 30 years in the Caribbean, floods and tropical storm damage affected 1.5 million people directly and caused over USD 5 billion in damage. The increasing frequency and intensity of extreme weather events stress societies and natural systems. Challenges 1. Affordability issues for the target low-income segment. Additional transaction cost and taxes. Also, even with this cost structure, insurers and distributors are not sufficiently incentivized to push the product. 2. Intensive marketing efforts and consumer education are needed to increase the scale of LPP. Technology
There are two major challenges with respect to agricultural insurance in Ghana: 1. Enrollment: Scaling performance of the agricultural insurance market remains low (very few products). The growth rate of the sector is very slow (36% from 2011–2016). Very poor performances in 2012 and 2013 when overall enrolment dropped by 84% and 86% respectively. These challenges are attributable to the complexity of insurance products, financial illiteracy, and aversion towards new risk management approaches. 2. Claims: The only prominent claim pay-outs were in 2015 where 1,701 farmers received a payment
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The development of sustainable insurance solutions requires a thorough risk assessment, modeling and layering. Agricultural and climate risks are mainly of a systemic nature, i.e. they affect a large geographic area or large parts of the population simultaneously. If the insured risk is not adequately spread, one catastrophic event can threaten the viability of the whole scheme. To lower covariate risks, the portfolio thus needs to be diversified in terms of crops, type of risks, and different geographical regions.
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The development of sustainable insurance solutions requires thorough risk assessment, modelling and layering. Agricultural and climate risks are mainly of a systemic nature, i.e. they affect a large geographic area or large parts of the population simulta neously. If the insured risk is not adequately spread, one catastrophic event can threaten the viability of the whole scheme. To lower covariate risks, the portfolio thus needs to be diversified in terms of crops, type of risks, and different geographical regions.