DOCSLIB.ORG

Climate Risk Insurance and Risk Financing in the Context of Climate Justice

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Climate Risk Insurance and Risk Financing in the Context of Climate Justice Climate Risk Insurance and Risk Financing in the Context of Climate Justice A Manual for Development and Humanitarian Aid Practitioners Imprint Published by Written by: Thomas Hirsch (Lead author), Climate and Development Advice Vera Hampel (Climate and Development Advice) Edited by: Rebekah Chevalier Designed by: Saskia Rowley Acknowledgement: This Toolkit is a product of the ACT Alliance Global Climate Change Project, implemented with the support of ACT member Brot für die Welt. 2020 cover photo: alpha kapola/nca R E P O R T Climate Risk Insurance and Risk Financing in the Context of Climate Justice A Manual for Development and Humanitarian Aid Practitioners List of figures ...........................................................................................1 List of abbreviations ............................................................................1 Glossary 3 Executive summary .............................................................................5 Contents Introduction ............................................................................................8 How to use this manual ....................................................................9 WHAT YOU NEED TO KNOW ABOUT CLIMATE RISKS 10 List of figures ......................................................................................................................................................................................................................1 COMPREHENSIVE CLIMATE RISK MANAGEMENT ...... 15 List of abbreviations .......................................................................................................................................................................................................1 15 Glossary 3 Executive summary ........................................................................................................................................................................................................5 JUSTICE, HUMAN RIGHTS, AND PRO-POOR PRINCIPLES TO GUIDE Introduction .......................................................................................................................................................................................................................8 CLIMATE RISK INSURANCE AND FINANCING 1 8 How to use this manual ...............................................................................................................................................................................................9 CLIMATE RISK INSURANCE ......................................................21 WHAT YOU NEED TO KNOW ABOUT CLIMATE RISKS ........................................................................................................................... 10 The role of climate risk insurance in redressing loss and damage 21 COMPREHENSIVE CLIMATE RISK MANAGEMENT ................................................................................................................................. 15 Types of climate risk insurance ..............................22 Parametric or index-based climate risk insurance 22 JUSTICE, HUMAN RIGHTS, AND PRO-POOR PRINCIPLES TO GUIDE Indemnity-based climate risk insurance ...........23 CLIMATE RISK INSURANCE AND FINANCING ...................................................................................................................... 18 Micro- and meso-level insurance ..........................23 CLIMATE RISK INSURANCE .................................................................................................................................................................................21 Macro-level insurance ................................................23 The role of climate risk insurance in redressing loss and damage ...............................................................................................21 Examples of climate risk insurance at micro or meso levels 24 Africa ...................................................................................24 Types of climate risk insurance .........................................................................................................................................................22 Asia-Pacific .......................................................................28 Parametric or index-based climate risk insurance ..................................................................................................................22 Latin America and the Caribbean .........................34 Indemnity-based climate risk insurance ......................................................................................................................................23 MENA region ...................................................................38 Micro- and meso-level insurance .....................................................................................................................................................23 Regional climate risk insurance pools .............................39 Macro-level insurance ...........................................................................................................................................................................23 African Risk Capacity (ARC) ................................... 41 Examples of climate risk insurance at micro or meso levels ..........................................................................................................24 Caribbean Climate Risk Insurance Facility (CCRIF SPC) 44 Africa ..............................................................................................................................................................................................................24 Pacific Climate Risk Assessment and Financing Initiative (PCRAFI) 46 Asia-Pacific ..................................................................................................................................................................................................28 Southeast Asia Disaster Risk Insurance Facility (SEADRIF) 47 Latin America and the Caribbean ....................................................................................................................................................34 InsuResilience Global Partnership and other support initiatives 48 MENA region ..............................................................................................................................................................................................38 CLIMATE RISK FINANCING ........................................................52 Regional climate risk insurance pools ........................................................................................................................................................39 The role of climate risk financing to redress loss and damage 52 African Risk Capacity (ARC) .............................................................................................................................................................. 41 Types of climate risk financing instruments ..................53 Caribbean Climate Risk Insurance Facility (CCRIF SPC) ....................................................................................................44 Examples of climate risk financing instruments .........54 Pacific Climate Risk Assessment and Financing Initiative (PCRAFI) ............................................................................46 National risk financing instruments .....................54 Southeast Asia Disaster Risk Insurance Facility (SEADRIF) ..............................................................................................47 International climate risk financing instruments 5 5 InsuResilience Global Partnership and other support initiatives .....................................................................................48 Risk transfer to third parties .....................................56 CLIMATE RISK FINANCING ...................................................................................................................................................................................52 CLIMATE RISK TRANSFER AT THE COMMUNITY LEVEL 57 The role of climate risk financing to redress loss and damage .......................................................................................................52 CONCLUSION .....................................................................................63 Types of climate risk financing instruments .............................................................................................................................................53 BIBLIOGRAPHY .................................................................................64 Examples of climate risk financing instruments ....................................................................................................................................54 National risk financing instruments ................................................................................................................................................54 International climate risk financing instruments ......................................................................................................................55 Risk transfer to third parties ................................................................................................................................................................56 CLIMATE RISK TRANSFER AT THE COMMUNITY LEVEL.....................................................................................................................57
Load more

Recommended publications
  • Climate Action Plan Executive Summary
    Climate Action Plan Executive Summary Commission on Climate Change August 2008 Executive Summary climate action plan • 3 Report Overview n April 20, 2007, Governor Martin O’Malley signed Executive Order 01.01.2007.07 (the Order) establishing the Maryland Commission on Climate Change (the Commission). Sixteen State agency heads and six members of the General Assembly comprise the Commission. The principal Ocharge of the Commission is to develop a Plan of Action (the Climate Action Plan) to address the drivers of climate change, to prepare for its likely impacts in Maryland, and to establish goals and timetables for implementation. The Order emphasized Maryland’s particular vulnerability to climate change impacts of sea level rise, increased storm intensity, extreme droughts and heat waves, and increased wind and rainfall events. It recognized that human activities such as coastal development, burning of fossil fuels, and increasing greenhouse gas (GHG) emissions are contributing to the causes and consequences of climate change. While noting Maryland’s recent climate initiatives, the Order emphasized that continued leadership by example by Maryland State and local governments is imperative. The Commission is supported by three Working Groups whose members were appointed by the Commission Chair, Shari T. Wilson, Secretary, Maryland Department of the Environment (MDE): Scientific and Technical Working Group (STWG), chaired by Donald Boesch, President, University of Maryland Center for Environmental Science, and co-chaired by Frank W. Dawson, Assistant Secretary of Maryland’s Department of Natural Resources (DNR); Greenhouse Gas and Carbon Mitigation Working Group (MWG), chaired by George (Tad) Aburn, Director of MDE’s Air and Radiation Management Administration, and co-chaired by Malcolm Woolf, Director, Maryland Energy Administration (MEA); and Adaptation and Response Working Group (ARWG), chaired by John R.
    [Show full text]
  • Second Progress Report on the German Strategy for Adaptation to Climate Change (DAS)
    Second Progress Report on the German Strategy for Adaptation to Climate Change (DAS) CONTENTS A. The German Adaptation Strategy (DAS): objectives, principles and processes ............................... 4 A.1. The DAS: principles and objectives ................................................................................................................. 4 A.2. The DAS reporting cycle ................................................................................................................................. 5 A.3. The DAS, APA and Progress Report in review ................................................................................................. 8 A.4. European Union and international integration ............................................................................................ 11 B. Current findings and results ........................................................................................................ 13 B.1. Monitoring: climatic changes, impacts and adaptation responses ............................................................. 13 B.2. Vulnerability assessment ............................................................................................................................. 18 B.3. APA II implementation and APA III preparation process .............................................................................. 33 B.4. Adaptation measures by other actors .......................................................................................................... 35 B.5. Evaluation of
    [Show full text]
  • Integrating Insurance Into Climate Risk Management
    INTEGRATING INSURANCE INTO CLIMATE RISK MANAGEMENT Conceptual Framework, Tools and Guiding Questions: Examples from the Agricultural Sector HOSTED BY Authors Gaby Ramm (Munich Climate Insurance Initiative − MCII advisory group member) Kehinde Balogun (Munich Climate Insurance Initiative − MCII) Matthias Range (Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH − GIZ) Co-authors Maxime Souvignet (MCII) We thank our contributors for their • Olu Ajayi (Technical Centre for Agricultural and Rural Cooperation − CTA) strong partnership and dedication • Florent Baarsch ( International Fund for Agricultural Development – IFAD) to provide in-depth feedback as • Daniela Bohl (GIZ) Peer Reviewers to this document: • Toon Bullens (Microinsurance Association Netherlands − MIAN) • Emily Coleman (IFAD) • Massimo Giovanola (IFAD) • Michael Hamp (IFAD) • Rachael Hansen (MCII) • Jon Hellin (International Maize and Wheat Improvement Center − CIMMYT) • Peter Hoeppe (MCII Chairman) • Vilma Hossini (Bundesanstalt Technisches Hilfswerk − THW) • Rhea Katsanakis (United Nations International Strategy for Disaster Reduction − UNISDR) • Nina Koeksalan (Food and Agriculture Organization – FAO) • Soenke Kreft (MCII) • Thomas Loster (Munich Re Foundation) • Jennifer Phillips (MCII) • Sandra Schuster (GIZ) • Mia Thom (Centre for Financial Regulation and Inclusion − CENFRI) • Branko Wehnert (GIZ) • Sebastian Wiegele (GIZ) • Michael Zissener (MCII) • Sabrina Zwick (MCII) 2 Abstract Today, emerging new risks from climate change and increasing GmbH (GIZ) have
    [Show full text]
  • CDP Climate Change Questionnaire 2018
    CDP Climate Change Questionnaire 2018 Page 1 CDP Climate Change Questionnaire 2018 C0 Introduction Introduction (C0.1) Give a general description and introduction to your organization. Response options This is an open text question. MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (“MetLife”), is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management to help its individual and institutional customers navigate their changing world. Founded in 1868, MetLife has operations in more than 40 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. MetLife is providing the answers to this Questionnaire at the request of CDP. The statements contained herein do not constitute warranties, guarantees, obligations or commitments. Any forward-looking statements contained herein are based on present knowledge and circumstances, may turn out to be incorrect and are not guarantees of future performance. MetLife is not obligated to correct, revise or update information given in this Questionnaire. (C0.2) State the start and end date of the year for which you are reporting data. Response options Please complete the following table. You are able to add rows by using the “Add Row” button at the bottom of the table. 2017-01-01 - 2017-12-31 (C0.3) Select the countries for which you will be supplying data. Response options Please complete the following table: Page 2 Country Hong Kong Greece Select all that apply: India Hungary [Country drop-down list] Japan Ireland Brazil Malaysia Italy Chile Nepal Poland Argentina South Korea Portugal Australia Vietnam Romania Bangladesh Bulgaria Russia Colombia Cyprus Slovakia Ecuador Czech Republic Spain Mexico France Turkey United States of America China Oman Uruguay Ukraine Qatar Egypt United Kingdom Saudi Arabia Jordan Bahrain United Arab Emirates Kuwait Lebanon (C0.4) Select the currency used for all financial information disclosed throughout your response.
    [Show full text]
  • California Climate Risk: Insurance-Based Approaches to Mitigation and Resilience
    California Climate Risk: Insurance-Based Approaches to Mitigation and Resilience July 23, 2019 UCLA School of Law Welcome California Climate Risk: Insurance-Based Approaches to Mitigation and Resilience July 23, 2019 | UCLA School of Law Keynote Address: California Insurance Commissioner Ricardo Lara California Climate Risk: Insurance-Based Approaches to Mitigation and Resilience July 23, 2019 | UCLA School of Law Panel 1: Physical Risk Assessment, Impact Mitigation, and Insurance • Alex Hall, UCLA Center for Climate Science • Alice Hill, Hoover Institution • Kristen Torres Pawling, County of Los Angeles • LeRoy Westerling, UC Merced School of Engineering Moderator: Sean Hecht, UCLA School of Law California Climate Risk: Insurance-Based Approaches to Mitigation and Resilience July 23, 2019 | UCLA School of Law Break California Climate Risk: Insurance-Based Approaches to Mitigation and Resilience July 23, 2019 | UCLA School of Law Panel 2: Nature-based Solutions • Secretary of Ecology and Environment Alfredo Arellano, State of Quintana Roo, Mexico • David BurtonPerry, Swiss Re • Deborah Halberstadt, UC Davis Coastal and Marine Sciences Institute • Raghuveer Vinukollu, Munich Re Moderator: Louis Blumberg, Blumberg West Consulting California Climate Risk: Insurance-Based Approaches to Mitigation and Resilience July 23, 2019 | UCLA School of Law Parametric Insurance Policy to Cover Beaches Recovery and Coral Reefs Quintana Roo, México California Climate Risk: Insurance-Based Approaches to Mitigation and Resilience Panel 2: Nature-based Solutions July, 23, 2019 Alfredo Arellano Guillermo Ministry of Environment State Government of Quintana Roo, México [email protected] Beach Erosion 2010 Playa del Carmen 2017 Hotel Porto Real Coastline 2010 Coastline 2017 Coral Reefs on Risk Coral Reefs are affected by: • Diseases • Water Pollution • Bleaching • Recreational activities • Hurricanes: Experts consider that hurricanes category 4 and 5 passing less than 65 km from the reefs are very likely to damage it (Alvarez-Filipp, et.al.
    [Show full text]
  • Closing the Protection Gap, Disaster Risk Financing: Smart Solutions For
    Closing the protection gap Disaster risk financing: Smart solutions for the public sector Every year natural and man-made catastrophes cause a distressing loss of lives and considerable economic costs around the world. Both industrialised and developing countries are affected. Surprisingly, both are also materially underinsured. This financing gap is borne largely by the public sector, and may create long-term fiscal instability at a time when government budgets are stretched. Furthermore rating agencies are starting to take a closer look at such contingent liabilities faced by public administrations. But there are ways to alleviate both the impacts and the costs of disaster by planning ahead. Insurance plays a critical role in effective disaster risk management helping communities get back on their feet faster. This report outlines tools and approaches proven to help governments, regions and cities, as well as the constituents they represent, to become more resilient. We’re smarter together Cover images Above: Cars getting stuck on flooded streets in Fukuyama, 23 June 2016, after areas of western Japan were hit by heavy rain, causing landslides and caving in roads. Below: Emergency workers supporting the recovery after an earthquake on 25 August 2016 in Amatrice, Italy Table of contents Disaster risks are growing 2 A major strain on government budgets 4 Resilience through insurance 6 More than one way to close 12 the protection gap Benefits of sovereign and 18 sub-sovereign risk transfer Case studies 21 A single house left standing after Hurricane Ike struck Gilchrist, Texas in 2008. Disaster risks are growing The economic cost of natural catastrophes has increased markedly.
    [Show full text]
  • COMMERCIAL INSURANCE PACKAGE (Applicable to Entertainment Related Risks Only)
    COMMERCIAL INSURANCE PACKAGE (Applicable to entertainment related risks only) 1. Full Legal Name of company(ies) to be Insured: 2. Business Address: 3. Contact Name: Fax: Web-site: Phone: Cell: Email: Please provide CV on background experience of the principals of the company along with a company bio if you have not previously obtained coverage through our office. 4. Describe your operations: 5. Date company established: 6. Number of full time employees: 7. Do you have employee health/ benefits plan? Yes No 8. Previous Insurer: Expiry Date: Have there been any losses in the last 5 years? Yes No If yes, how many and please provide details: 9. Has any form of insurance been declined or cancelled? Yes No 10. General Information: explain all “yes” responses below (a) Is equipment loaned or rented to others with/without operators Yes No (b) If you responded yes above, do they provide certificates of insurance Yes No (c) Is post production work done for others Yes No (d) Does applicant travel out of country with equipment Yes No (e) Are any repairs and/or installations done away from the premises Yes No (f) Are sub-contractors used Yes No (g) If yes, is proof of insurance obtained Yes No Explain in detail all “yes” answers in section 10: August ‘-09 Front Row Insurance Brokers Inc. T 604-684-FILM (3456) Toll Free: 1-866-690-3456 COMMERCIAL PACKAGE 604 – 1200 Burrard Street F 604-684-3437 Vancouver BC V6Z 2C7 Initial 1 PROPERTY INFORMATION . 11. Location Address: owned: rented: square Feet: no. of stories: CONSTRUCTION Fire Resistive masonry
    [Show full text]
  • WEATHER INDEX INSURANCE for AGRICULTURE: Guidance for Development Practitioners
    AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 50 WEATHER INDEX INSURANCE Public Disclosure Authorized FOR AGRICULTURE: Guidance for Development Practitioners Public Disclosure Authorized Public Disclosure Authorized Maize Index, 1962−2007 140.00 3500000 120.00 3000000 100.00 2500000 80.00 2000000 oduction (MT) e pr alue v 60.00 1500000 otal maiz 40.00 1000000 Maize Index, MMI national t Public Disclosure Authorized Met Office 75-Station Model 20.00 National Total Maize Production (Normalized AP) 500000 0.00 0 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 harvest year NOVEMBER 2011 A&R_Risk_Cover.indd 2 29/10/11 1:02 PM AGRICULTURE AND RURAL DEVELOPMENT DISCUSSION PAPER 50 WEATHER INDEX INSURANCE FOR AGRICULTURE: Guidance for Development Practitioners A&R_Risk_FM.indd 1 28/10/11 11:59 AM © 2011 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone: 202-473-1000 Internet: http://www.worldbank.org/rural All rights reserved. The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is copyrighted.
    [Show full text]
  • Task Force on Climate-Related Financial Disclosures
    Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures June 2017 June 2017 Recommendations of the Task Force on Climate-related Financial Disclosure i Contents A Introduction .................................................................................................................................................... 1 1. Background ................................................................................................................................................................... 1 2. Structure of Recommendations .................................................................................................................................. 2 3. Application of Recommendations .............................................................................................................................. 3 4. Assessing Financial Impacts of Climate-Related Risks and Opportunities ............................................................ 4 B Recommendations ....................................................................................................................................... 11 C Guidance for All Sectors .............................................................................................................................. 14 1. Governance ................................................................................................................................................................. 14 2. Strategy .......................................................................................................................................................................
    [Show full text]
  • Weather Insurance for Farmers: Experience from Ethiopia Nahu Senaye Araya
    Weather Insurance for Farmers: Experience from Ethiopia Nahu Senaye Araya Session 5 Breakout Session 11 Weather Insurance for Farmers: Experience from Ethiopia1 Nahu Senaye Araya2 Paper presented at the IFAD Conference on New Directions for Smallholder Agriculture 24-25 January, 2011 International Fund for Agricultural Development Via Paolo Di Dono, 44, Rome 00142, Italy 1 Copyright of the paper is reserved by IFAD. The paper may not be reproduced in part or in full and in any form without written permission of the Conference Organisers at IFAD (e-mail: [email protected]) 2 The author is Chief Executive Officer of Nyala Insurance, Addis Ababa, Ethiopia Summary Agriculture is the dominant sector in the Ethiopian economy where 83% of the population fully depends on and more than 43% of the GDP is generated. This sector in turn is dominated by a subsistence farming where more than 95% is a rain fed farming of which more than 90% owned by a smallholder (mostly less than half hectar) poor farmers. These smallholder farmers are highly exposed to the negative impact of climate change mainly reflected in shortage of rainfall (draught) in this part of the continent. The climate risk mitigation mechanisms existing in the country are more of informal traditional ways of risk sharing and risk smoothing mechanism. Whereas the covariant nature of the climate risk like draught cannot be copped with this traditional mechanisms. Therefore as an innovative means of market mechanism Nyala Insurance S.C. (NISCO) has introduced insurance products which can help in mitigating the impact of climate risk.
    [Show full text]
  • Division of Insurance 2008 Annual Report 1
    Commonwealth of Massachusetts Division of Insurance 2008 Annual Report Nonnie S. Burnes Commissioner of Insurance www.mass.gov\doi Table of Contents 1. Division of Insurance .......................................................................................................1 Mission ................................................................................................................................................ 1 Primary Activities ................................................................................................................................. 1 Organizational Chart ........................................................................................................................... 3 Human Resources ............................................................................................................................... 3 Budget, Revenue & Assessments ....................................................................................................... 4 The Massachusetts Insurance Marketplace ........................................................................................ 7 2. Significant Events of 2008 ............................................................................................. 10 Automobile Insurance Reform ........................................................................................................... 10 Global Financial Crisis ....................................................................................................................... 13 3.
    [Show full text]
  • How Insurance Can Support Climate Resilience Swenja Surminski, Laurens M
    opinion & comment COMMENTARY: How insurance can support climate resilience Swenja Surminski, Laurens M. Bouwer and Joanne Linnerooth-Bayer Insurance is gaining importance in and beyond the climate negotiations and offers many opportunities to improve climate risk management in developing countries. However, some caution is needed, if current momentum is to lead to genuine progress in making the most vulnerable more resilient to climate change. as 2015 ‘the year of climate of governments and individuals across value for money. Some critics point out insurance’? Statements emerging the world. that traditional insurance is an expensive Wfrom the G7 leaders and COP21 mechanism with high transaction and in Paris certainly suggest so. Article 8 of the … but some scepticism remains capital costs, making premiums far higher Paris Agreement includes “Risk insurance Any new insurance scheme in developing than expected losses. This suggests that facilities, climate risk pooling and other countries needs to overcome difficult adaptation funds might be better spent on insurance solutions” as areas of action1. challenges, including lack of risk data, other types of safety net rather than on Earlier in the year, at their summit in limited financial literacy, and weak financial buying insurance cover from international Germany, the leaders of the G7 launched a infrastructure; it also needs high levels of insurance markets8. new Initiative on Climate Risk Insurance support to make it viable for people with Critics further caution that subsidized (InsurResilience), pledging to bring very low income. Many of the new pilots insurance can dampen incentives to reduce climate insurance to 400 million currently and pools have been designed with this risks.
    [Show full text]