Innovative insurance solutions for climate change: How to integrate climate risk insurance into a comprehensive climate risk management approach

Tweet

Posted on: 13 November 2013
By: mackene
No Comments »
Filed under: News

A new report by the Munich Climate Insurance Initiative and the Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ) examines how insurance fits into a country’s comprehensive climate risk management strategy. The report explores how insurance can enhance existing risk management approaches to assist affected populations and enhance prevention and risk reduction. Including risk transfer tools like insurance may in some cases also speed up recovery efforts after extreme weather events. By transferring some of the risk and the financial burden to a third party, the report finds evidence that some insurance programs have shielded national budgets of governments. Furthermore, insurance availability is correlated with better economic performance after shocks such as weather-related hazard events (e.g. typhoons, hurricanes). On the household level, insurance has been shown to manage risks that would be too large for individuals to cover on their own after losing their assets in a natural catastrophe. The report also finds evidence of limitations and identifies opportunities for using insurance to manage climatic risks. Programs should be designed and implemented as part of an integrated climate risk management strategy involving a balanced mix of approaches.

Read more online