Boosting climate risk insurance networks to support vulnerable communities
Bonn 13 December 2019 – The year 2019 once again proved challenging for many communities around the world who are living at the frontlines of climate change. Low-lying island states for example were hit by a number of weather events, including hurricanes, tropical storms, tsunamis, excess rainfall, drought, storm surge and wave impacts making it clear that the need for adaptation solutions is pressing.
“In addition to cutting emissions, we need to support the most vulnerable people with options to protect themselves against the impacts of more frequent and more intense weather events,” said Soenke Kreft, Director of the Munich Climate Insurance Initiative (MCII). “Climate risk insurance can be such a measure if it is applied within a mix of other disaster risk reduction strategies. While the field of climate risk insurance has made great advancements in the last decade, it is still considered as an innovation in the field of climate change, and as such, it can benefit greatly from more systematic approaches, enhanced knowledge sharing and networking between regions and among different actors.”
In a commitment to this, the United Nations University Institute for Environment and Human Security (UNU-EHS), the Munich Climate Insurance Initiative (MCII), the University of the South Pacific (USP), The University of the West Indies (UWI) and the United Nations Pacific Financial Inclusion Programme (PFIP) have established a research collaboration to facilitate inter-regional South-South learning and research.
With the Climate Risk Insurance Research Collaboration (CRIRC), the partners have established a framework for coordination and collaboration on research, development and publication of academic research and policy papers on disaster risk finance, insurance and social payment.
One of the first research priorities for CRIRC is the informal economy in island states in the Pacific, which consists of informal entrepreneurs, who are vibrant and visible players creating a livelihood for themselves and their families. Working as fresh produce sellers, handicraft creators, beekeepers and fish and crab sellers, they operate outside the realm of formal legal protection and without easy access to formal financial and business support systems. They work as single-person operations or as micro or family enterprises, and women are predominant in these types of income-generating activities.
The extent and impact of damage caused by weather events, such as cyclones, means that many governments of Small Island States face critical challenges in ensuring their financial resilience to climate change and natural hazards. They often only have restricted options to secure funds for recovery and reconstruction without compromising their long-term fiscal balance.
The research partners therefore aim to work together to explore the socio-economic and regulatory needs and demands for disaster risk finance in small islands countries, to develop and assess innovative risk financing mechanisms, and to identify how disaster risk financing tools can be integrated into countries’ risk management and disaster response toolboxes.
“The University of the West Indies (UWI) is duty-bound and privileged to be a partner in this initiative,” stated Vice-Chancellor of the UWI, Professor Sir Hilary Beckles. “As an activist university with regard to Climate Resilience, and one situated within a region where climate change is an existential threat, we regard it our duty to contribute our expertise in climate change adaptation, disaster risk reduction, and sustainable development; and to strengthen our ties with academics, national and local authorities of the Pacific Island Countries, who are facing many of the climate change-related challenges that we do.” These sentiments are echoed by Dr. Donovan Campbell (UWI's focal point for the Climate Risk Insurance Research Collaboration) who noted that the recent losses and damages associated with disasters across the Caribbean has brought climate risk insurance into sharp focus.
In the absence of easy access to debt and affordable, reliable insurance solutions, a large portion of the economic losses stemming from climate change events are currently being borne by governments, communities and households supported by development partners. Impact is felt for many years, resulting in an emerging population in climate poverty. CRIRC aims to identify ways to prevent this climate poverty in Small Islands Countries through improved climate insurance research cooperation and coordination.
The United Nations Capital Development Fund managed Pacific Financial Inclusion Programme has been at the forefront of pioneering market based microinsurance solutions for the mass market in the Pacific through its work on financial inclusion in the region for over a decade. “We are excited to be actively collaborating with MCII and the three academic institutions, USP, UWI and UNU through this cooperation that aims to foster an active research and learning agenda in the new Pacific Insurance and Climate Adaptation Programme being developed” said Krishnan Narasimhan, Deputy Programme Manager of UNCDF PFIP. The expertise and familiarity of PFIP in the Pacific and its ability to bring together public and private sector for ecosystem and market systems development will add value to the cooperation.
About the University of the South Pacific (USP)
USP is the premier provider of higher education in the Pacific region and an international centre of excellence for teaching, research consulting, and training on all aspects of Pacific culture and the environment. The university has campuses across the region and is owned by the governments of twelve Pacific island countries. For more info, visit the USP.
About The University of the West Indies (UWI)
The UWI is an internationally respected university rooted in the Caribbean. Its operations spread across the English-speaking Caribbean archipelago encompassing five campuses: Mona in Jamaica, St. Augustine in Trinidad and Tobago, Cave Hill in Barbados, Five Islands in Antigua and Barbuda, Open Campus, and international centres in North America, Latin America, Asia, and Africa. Ranked among the top 600 universities in the world for 2019 and 2020, and the 40 best universities in Latin America and the Caribbean for 2018 and 2019 by Times Higher Education, The UWI is the only Caribbean-based university to make these prestigious lists. In recognition of its world class research on climate change and sustainable development, the International Association of Universities (IAU) selected The UWI as its global leader in the mobilisation of research and advocacy for the achievement of a climate-smart world. For more, visit The UWI.
About the United Nations Pacific Financial Inclusion Programme (PFIP)
PFIP is a Pacific-wide programme that has helped over two million Pacific islanders gain access to financial services and financial education. It achieves these results by funding innovation with financial services and delivery channels, supports policy and regulatory initiatives, and the empowerment of consumers. It is jointly administered by the UN Capital Development Fund and the United Nations Development Programme. For more info, click here.
About the United Nations University, Institute for Environment and Human Security (UNU-EHS)
Based in Bonn, Germany, UNU-EHS conducts research on risks and adaptation related to environmental hazards and global change. The institute’s research promotes policies and programmes to reduce these risks, while taking into account the interplay between environmental and societal factors. Research areas include climate change adaptation by incorporating insurance-related approaches, environmentally induced migration and social vulnerability, ecosystem-based solutions to adaptation and disaster risk reduction, and models and tools to analyse vulnerability and risks linked to natural hazards, with a focus on urban space and rural-urban interfaces. UNU-EHS also offers the joint Master of Science degree programme “Geography of Environmental Risks and Human Security” with the University of Bonn and hosts international PhD projects and courses on global issues of environmental risks and sustainable development. For more info on UNU-EHS, click here.
About the Munich Climate Insurance Initiative (MCII)
MCII was initiated as a non-profit organization by insurers, research institutes and NGOs in April 2005 in response to the growing realization that insurance solutions can play a role in adaptation to climate change, as suggested in the Framework Convention on Climate Change and the Kyoto Protocol. This initiative is hosted at the United Nations University Institute for Environment and Human Security (UNU-EHS). It focuses on bringing solutions for the risks posed by climate change with a view to protect the most vulnerable people. MCII provides a forum and gathering place for insurance-related expertise applied to climate change issues. For more information, please visit: www.climate-insurance.org
For more information, please contact:
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