Academics say insurance could play key role in reducing climate change risks

A group of academic who have been working with the United Nations University Institute for Environment and Human Security
(UNU-EHS) and the Munich Climate Insurance Initiative (MCII) have called for diplomats attending the upcoming Bonn and Mexico climate talks and summit to take insurance into account.

A policy brief issued by the academic groups calls for insurance to play a key role in reducing climate change risks and influencing climate adaptation projects.

“Our research over the past years has shown that insurance solutions – with coordinated public-private action and some international support – has the potential to help vulnerable countries and people adapt to climate change”, stated Koko Warner (UNU-EHS), lead author of the policy brief ‘Solutions for Vulnerable Countries and People’. “Now it is time to move
from knowledge to action. The need to link DRR and insurance and scaling them up is greater than ever to get the critical mass for adaptation”, Dr. Warner continued.

Prof. Peter Hoeppe (Head of Geo Risks Research and Corporate Climate Centre of Munich Re) added: “In the past three decades, 95% of deaths from natural disasters happened in developing countries. In the last 10 years, economic losses averaged US$ 100 billion per year – people need help to manage increasing risks.”

The report discusses some of the successful microinsurance and index-linked weather insurance pilots which have been taking place around the world and warns that without sufficient support for these projects they will struggle to expand. They call on the pilot projects to be supported as part of an international climate change agreement. They also call for risk modelling to play a key role.

As well as important for developing nations this is also a good opportunity for the insurance and risk transfer industry to demonstrate it’s competence within the area of weather and disaster risk management.

Download and read the policy brief Solutions for Vulnerable Countries and People Designing and Implementing Disaster Risk Reduction & Insurance for Adaptation.