Four initiatives which involve over 100 insurers from around the globe have issued a call to governments worldwide to utilise risk management, risk transfer and insurance techniques and expertise to help the developing world cope with the changing climate.
The four initiatives; ClimateWise, the United Nations Environment Programme Finance Initiative, The Geneva Association and the Munich Climate Insurance Initiative (MCII) issued a joint statement calling on governments of the world to harness proven re/insurance industry techniques for tackling the financial impact of climate change.
The coalition of initiatives say that there is enormous potential to be derived from allowing a public-private partnership approach to tackling these climate risks and highlight that several regions of the world are already benefiting from such approaches. They highlight the recent case of 4,500 Mongolian herders who are receiving payments for cattle losses due to a harsh winter thanks to an index-linked insurance scheme. They also highlight the Caribbean Catastrophe Risk Insurance Facility, which as we reported recently will pay out to Anguilla for Hurricane Earl losses.
The insurance industries alternative risk initiatives such as catastrophe funds, index-linked weather insurance cover and microinsurance are all really making a difference in developing countries. Catastrophe bonds also have a role to play as can be seen from the MultiCat transaction. It seems common sense that governments ensure the industry has a seat at the table to negotiate the best way to increase and continue that assistance.
Read the full statement here.