Background facts InsuResilience Solutions Fund (ISF)
It was founded and has been financed by KfW on behalf of the BMZ. Frankfurt School of Finance & Management is charged with implementing the programme.
The purpose of the ISF is to enhance the resilience of poor and vulnerable people against extreme weather events such as floods, storms, heavy rains, droughts and cold periods. To that end, the ISF provides support through four components:
- It carries out comprehensive climate risk analyses to provide vital data and information to governments, businesses and civil society. Through the Global Risk Modelling Alliance Program (External link) (GRMA Program) the ISF boosts expertise and experience in the field of climate risk analysis in partner countries. It does this by means of in-process knowledge transfer, with input from insurance industry experts. This enables partner countries to develop their own needs-based climate change adaptation strategies and proactive climate risk management.
- The ISF also funds studies and advisory services for the development of new concepts for climate risk insurance products, taking account of the specific needs of poor and vulnerable groups.
- One key element of the programme is the provision of partial funding for the development costs of innovative climate risk insurance products and their introduction to the market.
- Furthermore, the ISF offers targetted financing of premiums in order to facilitate market launch of the insurance products developed.
With its innovative approach, the ISF seeks to leverage the expertise and risk capital of the insurance industry throughout all components. Joint initiatives with local partners, insurance industry companies and NGOs make sure that climate risk insurance will be effective in those places where it is needed, thus ensuring the sustainability of both supply and demand.
For instance, the Fund signed a support agreement with the Rwandan Ministry of Finance and Economic Planning and with international insurance and reinsurance broker K. M. Dastur & Company Limited (KMD) to give small farmers improved and broader access to agricultural insurance. The ISF grant is used to partly finance the development and market introduction of an innovative index-based insurance scheme for small farmers in Rwanda. By 2025, the scheme is to cover some 1.25 million people.
As at: 20/09/2022