Climate change and development Climate risk insurance
During its G7 Presidency, Germany has made a start on developing a Global Shield against Climate Risks. The Shield gathers activities in the field of climate risk finance and preparedness under one roof. As a result, people and authorities will be able to access the assistance that they urgently need when disaster strikes more easily and more quickly.
The Shield builds upon the InsuResilience Global Partnership, which works towards comprehensive and active climate risk management worldwide. The Partnership promotes cooperation among states, the private sector, multilateral institutions, civil society organisations and research institutes.
German activities InsuResilience Global Partnership
Expanding climate and disaster risk finance and insurance solutions
The aim of the InsuResilience Global Partnership (External link) is to increase the long-term resilience of the poorest and most vulnerable groups in developing countries and emerging economies against climate risks. The expansion of climate risk financing and insurance instruments is intended to enable governments, enterprises and households to respond more quickly and effectively to natural disasters, thus minimising potential resulting costs.
During Germany's G20 Presidency in 2017, it joined forces with the UK, Fiji, Ethiopia and the World Bank to launch the InsuResilience Global Partnership as a joint G20 and V20 initiative. The V20 (Vulnerable Twenty Group) is an alliance of the finance ministers of the 55 countries that are most vulnerable to climate change. The Partnership now has more than 120 members representing industrialised and developing countries, civil society, the private sector, international organisations and the scientific community (as of September 2022). Germany is the biggest supporter of this key initiative.
The various programmes within the Partnership support pre-agreed schemes (such as climate risk insurance) which provide protection against the financial risks of climate impacts and disasters. Quick assistance and recovery protect the livelihoods of poor and vulnerable people against the consequences of climate-related events. Moreover, the Partnership supports the development of comprehensive climate and disaster risk strategies at the national and local levels in poor and vulnerable countries.
The Partnership has set itself an ambitious target in its Vision 2025: to provide coverage to 500 million of the world's poorest and most vulnerable people by 2025.
Currently, 24 programmes comprising over 300 projects are in progress under the umbrella of the InsuResilience Global Partnership in more than 100 countries. As a result, 150 million people had already gained coverage against climate risks in 2021. The Global Shield against Climate Risks builds on this experience, the existing structures and the close partnership with the V20. The Global Shield shall integrate the existing activities and make them more readily accessible, while mobilising additional finance at the same time. Cover against climate risks shall thus be made more systematic, better coordinated and more permanent compared to previous instruments. The aspiration is to provide coverage against climate risks for more poor and vulnerable people and countries in a more effective manner, closing their coverage gap permanently in a step-by-step process.
Further information about the Partnership:
German activities BMZ achievements in the field of climate risk insurance
The InsuResilience Global Partnership assists national and sub-national governments in developing comprehensive climate and disaster risk management strategies so as to improve their preparedness for the negative consequences of climate change.
Germany continues to support existing programmes such as African Risk Capacity (ARC). By mid-2020, ARC drought insurance paid out 61 million US dollars to the governments of Mauritania, Senegal, Malawi, Niger and Côte d'Ivoire and to humanitarian players such as the Start Network, assisting more than 3.2 million people in severe drought situations.
As at: 20/09/2022