On Friday 9 July, the continuation of the cooperation between KfW and Frankfurt School was sealed with the signing of the contract for a further phase. The InsuResilience Solutions Fund (ISF) was set up by KfW on behalf of the BMZ at Frankfurt School to support the development of innovative and sustainable climate risk insurance solutions in developing and emerging countries. The aim is to strengthen the resilience of households, small and medium-sized enterprises and governments to the impacts of climate change and natural disasters.
"Climate finance and climate risk insurance are highly relevant to development policy in the broader context of climate change adaptation and disaster risk reduction. The InsuResilience Solutions Fund, managed by Frankfurt School, is doing important implementation work in this area, combining both private and public sector interests", says Prof. Dr. Nils Stieglitz, President of Frankfurt School.
Since its start in 2019, the ISF has already launched five Calls for Proposals that have attracted interest from around the world. Applicants to the Call for Proposals include businesses and organisations from the private and public sectors, as well as civil society. To date, the Fund has received over 200 concept notes to co-finance the product development of innovative climate risk insurance solutions.
The ISF is a key programme of the InsuResilience Global Partnership. The global partnership for climate and disaster risk financing and insurance solutions is committed to expanding the use of climate risk insurance. With its Vision 2025, the partnership has set itself ambitious targets. Among its objectives, the international initiative wants to contribute to insuring an additional 500 million people in developing countries against losses caused by extreme weather events by 2025.
In view of the burden of COVID, it is more important than ever to insure vulnerable countries against climate risks as quickly as possible in order to mitigate additional impacts from natural disasters. The goal of Vision 2025 is therefore also to develop comprehensive disaster risk financing strategies with 80 countries to integrate insurance solutions more strongly into the countries' climate and disaster risk management policies. The expansion of ISF support in the area of advisory and concept development, which is planned for the new project phase, strengthens the consideration of these aspects in the development of new insurance approaches and thus contributes to the development of integrated, comprehensive solutions.
In order to rapidly expand the protection of vulnerable and poor countries against climate risks, insurance approaches at national or subnational level make a particularly important contribution. At the UN Climate Summit, the BMZ therefore signed an agreement with the United Nations Development Programme (UNDP) and the Insurance Development Forum (IDF) for a programme of technical assistance for vulnerable countries until 2025. The need for a significant expansion of financing and insurance solutions is also recognised at UN level.
In his recent speech at the IDF Summit, UN Secretary-General António Guterres called for a more systematic linkage between climate risk insurance and development finance to increase the resilience of poor and vulnerable countries to disasters and to better manage climate risks in the future. The additional funding will allow ISF to further strengthen its support for the implementation of this public-private partnership and contribute to the development of innovative insurance solutions for vulnerable countries.