Climate and DIsaster Risk Finance and Insurance
Arranging access to financial resources before a disaster strike is essential
Over the last decade, the consequences of climate change have intensified dramatically. Storms, droughts and floods are continuing to become more frequent and severe, while slower-onset climate impacts also threaten progress towards the Sustainable Development Goals. Even with increased climate action and investments in adaptation, residual risks remain, leading to climate-related losses and damages.
To manage these risks and cope with the financial consequences of climate disasters, governments and vulnerable communities require reliable climate risk information and appropriate financing tools. Pre-arranged financing solutions that are secured or structured in advance of a shock or disaster ensure that financial resources are readily available when they are needed most. These mechanisms help address, minimise and avert the impacts of climate change on vulnerable communities.
Such financial instruments include [climate-related] disaster risk insurance solutions, contingent credit and disaster risk funds, credit guarantees, and climate resilient debt instruments such as shock-resilient loans.
Core Expertise
Climate Risk Finance
We promote the development and implementation of pre-arranged financing solutions to reduce financial losses, enable rapid payouts, and build the capability of countries and partners to access and use financial services.
Climate Risk Management
We support partners in planning for, reducing, and managing the impacts of climate and disaster risks by strengthening policies, systems, and decision-making processes. This includes translating (climate) risk information into actionable strategies that enhance preparedness, lower vulnerability, and improve long-term resilience.
Climate Risk Analysis
We provide impartial assessments of climate risk and modelling approaches, helping partners understand current and future risks and identify the full range of adaptation strategies needed to strengthen resilience.
Capability Development
We offer globally relevant education programmes for governments, donors, development finance institutions, development banks, regional risk pools, and financial institutions. Our capability development covers Climate Risk Insurance, Climate Risk Finance, Climate Adaptation Finance and more.
Core Expertise
Climate Risk Finance
We promote the development and implementation of pre-arranged financing solutions to reduce financial losses, enable rapid payouts, and build the capability of countries and partners to access and use financial services.
Climate Risk Management
We support partners in planning for, reducing, and managing the impacts of climate and disaster risks by strengthening policies, systems, and decision-making processes. This includes translating (climate) risk information into actionable strategies that enhance preparedness, lower vulnerability, and improve long-term resilience.
Climate Risk Analysis
We provide impartial assessments of climate risk and modelling approaches, helping partners understand current and future risks and identify the full range of adaptation strategies needed to strengthen resilience.
Capability Development
We offer globally relevant education programmes for governments, donors, development finance institutions, development banks, regional risk pools, and financial institutions. Our capability development covers Climate Risk Insurance, Climate Risk Finance, Climate Adaptation Finance and more.
Core Expertise
Climate Risk Finance
We promote the development and implementation of pre-arranged financing solutions to reduce financial losses, enable rapid payouts, and build the capability of countries and partners to access and use financial services.
Climate Risk Management
We support partners in planning for, reducing, and managing the impacts of climate and disaster risks by strengthening policies, systems, and decision-making processes. This includes translating (climate) risk information into actionable strategies that enhance preparedness, lower vulnerability, and improve long-term resilience.
Climate Risk Analysis
We provide impartial assessments of climate risk and modelling approaches, helping partners understand current and future risks and identify the full range of adaptation strategies needed to strengthen resilience.
Capability Development
We offer globally relevant education programmes for governments, donors, development finance institutions, development banks, regional risk pools, and financial institutions. Our capability development covers Climate Risk Insurance, Climate Risk Finance, Climate Adaptation Finance and more.
CDRFI Programmes
ISF
InsuResilience Solutions Fund
The InsuResilience Solutions Fund (ISF) aims to support innovative solutions that mitigate the negative impacts of climate change. Managed by Frankfurt School and financed by KfW Development Bank on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), the ISF works to close the protection gap by targeting vulnerable populations disproportionately affected by climate risks.
To achieve this, ISF fosters the development of needs-based, financially sustainable climate risk insurance products in developing and emerging countries.
GRMA
Global Risk Modelling Alliance
The Global Risk Modelling Alliance (GRMA) is supporting countries to enhance their capabilities in analysing current and future climate risks. The GRMA was founded by the V20 Group of Ministers of Finance of the Climate Vulnerable Forum and the Insurance Development Forum. Funded by the German Federal Ministry for Economic Cooperation and Development (BMZ), through KfW, and hosted by ISF, GRMA builds country capabilities in risk analytics through open data, technology and practical learning, by undertaking co-development of risk management strategies and applied risk finance projects.
GSSP
Global Shield-Solutions Platform
The Global Shield Solutions Platform (GSSP) is a central component of the financing architecture of the Global Shield against Climate Risks. It provides technical assistance and financial support to partner countries to strengthen the resilience of vulnerable communities against climate risks and consequently help to avert, minimise and address losses and damages of climate change.
GSSP aims to foster the development and use of CDRFI solutions by providing support via financial grants and advisory support along two support mechanisms: country support packages and global and regional programmes.
CDRFI Programmes
01
InsuResilience Solutions Fund
The InsuResilience Solutions Fund (ISF) aims to support innovative solutions that mitigate the negative impacts of climate change. Managed by Frankfurt School and financed by KfW Development Bank on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), the ISF works to close the protection gap by targeting vulnerable populations disproportionately affected by climate risks.
To achieve this, ISF fosters the development of needs-based, financially sustainable climate risk insurance products in developing and emerging countries.
02
Global Risk Modelling Alliance
The Global Risk Modelling Alliance (GRMA) is supporting countries to enhance their capabilities in analysing current and future climate risks. The GRMA was founded by the V20 Group of Ministers of Finance of the Climate Vulnerable Forum and the Insurance Development Forum. Funded by the German Federal Ministry for Economic Cooperation and Development (BMZ), through KfW, and hosted by ISF, GRMA builds country capabilities in risk analytics through open data, technology and practical learning, by undertaking co-development of risk management strategies and applied risk finance projects.
03
Global Shield-Solutions Platform
The Global Shield Solutions Platform (GSSP) is a central component of the financing architecture of the Global Shield against Climate Risks. It provides technical assistance and financial support to partner countries to strengthen the resilience of vulnerable communities against climate risks and consequently help to avert, minimise and address losses and damages of climate change.
GSSP aims to foster the development and use of CDRFI solutions by providing support via financial grants and advisory support along two support mechanisms: country support packages and global and regional programmes.
CDRFI Programmes
01
InsuResilience Solutions Fund
The InsuResilience Solutions Fund (ISF) aims to support innovative solutions that mitigate the negative impacts of climate change. Managed by Frankfurt School and financed by KfW Development Bank on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), the ISF works to close the protection gap by targeting vulnerable populations disproportionately affected by climate risks.
To achieve this, ISF fosters the development of needs-based, financially sustainable climate risk insurance products in developing and emerging countries.
02
Global Risk Modelling Alliance
The Global Risk Modelling Alliance (GRMA) is supporting countries to enhance their capabilities in analysing current and future climate risks. The GRMA was founded by the V20 Group of Ministers of Finance of the Climate Vulnerable Forum and the Insurance Development Forum. Funded by the German Federal Ministry for Economic Cooperation and Development (BMZ), through KfW, and hosted by ISF, GRMA builds country capabilities in risk analytics through open data, technology and practical learning, by undertaking co-development of risk management strategies and applied risk finance projects.
03
Global Shield-Solutions Platform
The Global Shield Solutions Platform (GSSP) is a central component of the financing architecture of the Global Shield against Climate Risks. It provides technical assistance and financial support to partner countries to strengthen the resilience of vulnerable communities against climate risks and consequently help to avert, minimise and address losses and damages of climate change.
GSSP aims to foster the development and use of CDRFI solutions by providing support via financial grants and advisory support along two support mechanisms: country support packages and global and regional programmes.
Project Experience
Analysis of drought risk in Afar and Somali, Ethiopia
The climate risk analysis is based on the Economics of Climate Adaptation (ECA) Methodology, combining risk assessment as well as identification and assessment of adaptation measures and risk transfer solutions. Climate risk analytics are increasingly important to effectively develop adaptation strategies and manage climate risks.
For Ethiopia, however, limited climate risk information is available to inform adaptation decisions. The study is implemented in cooperation with the United Nations University - Institute for Environment and Human Security (UNU-EHS) in the Afar and Somali regions in eastern Ethiopia, which are prone to extreme climate conditions. As the majority of these populations depend on the (agro-) pastoral lifestyle, the regions are highly susceptible to the expected impacts of climate change.
The results of the study support the Ministry of Agriculture in identifying cost-effective climate adaptation measures and developing their adaptation strategy, including risk transfer solutions.
Rapid Response Reef Risk Financing in the Mesoamerican Reef Region
The overall objective is to actively contribute to nature-based approaches as called for at the UN Climate Summit in September 2019. The project supports the conservation of the MAR region (Mexico, Belize, Guatemala and Honduras) by implementing a parametric insurance scheme for reefs to deliver quick financing for rapid response and reef restoration actions, after damages caused by hurricanes.
Reef insurance is an innovative financial mechanism that can contribute to reef restoration and recovery. The insurance element is part of a larger programme to build the long-term resilience of reefs as well as the livelihoods they support and protect along the entire Mesoamerican Reef.
Climate risk insurance to provide emergency liquidity in times of crises in Colombia
The aim of the insurance product is to bridge income losses and immediate liquidity needs after natural disasters for the affected target group.
The current COVID-19 pandemic shows once again the important role insurance plays in the event of loss of income due to business interruption. With the aim of reaching 300,000 beneficiaries by 2022, the project offers a holistic solution that stabilises the income of vulnerable households and thus strengthens their resilience.
Project Experience
Analysis of drought risk in Afar and Somali, Ethiopia
The climate risk analysis is based on the Economics of Climate Adaptation (ECA) Methodology, combining risk assessment as well as identification and assessment of adaptation measures and risk transfer solutions. Climate risk analytics are increasingly important to effectively develop adaptation strategies and manage climate risks.
For Ethiopia, however, limited climate risk information is available to inform adaptation decisions. The study is implemented in cooperation with the United Nations University - Institute for Environment and Human Security (UNU-EHS) in the Afar and Somali regions in eastern Ethiopia, which are prone to extreme climate conditions. As the majority of these populations depend on the (agro-) pastoral lifestyle, the regions are highly susceptible to the expected impacts of climate change.
The results of the study support the Ministry of Agriculture in identifying cost-effective climate adaptation measures and developing their adaptation strategy, including risk transfer solutions.
Rapid Response Reef Risk Financing in the Mesoamerican Reef Region
The overall objective is to actively contribute to nature-based approaches as called for at the UN Climate Summit in September 2019. The project supports the conservation of the MAR region (Mexico, Belize, Guatemala and Honduras) by implementing a parametric insurance scheme for reefs to deliver quick financing for rapid response and reef restoration actions, after damages caused by hurricanes.
Reef insurance is an innovative financial mechanism that can contribute to reef restoration and recovery. The insurance element is part of a larger programme to build the long-term resilience of reefs as well as the livelihoods they support and protect along the entire Mesoamerican Reef.
Climate risk insurance to provide emergency liquidity in times of crises in Colombia
The aim of the insurance product is to bridge income losses and immediate liquidity needs after natural disasters for the affected target group.
The current COVID-19 pandemic shows once again the important role insurance plays in the event of loss of income due to business interruption. With the aim of reaching 300,000 beneficiaries by 2022, the project offers a holistic solution that stabilises the income of vulnerable households and thus strengthens their resilience.
Project Experience
Analysis of drought risk in Afar and Somali, Ethiopia
The climate risk analysis is based on the Economics of Climate Adaptation (ECA) Methodology, combining risk assessment as well as identification and assessment of adaptation measures and risk transfer solutions. Climate risk analytics are increasingly important to effectively develop adaptation strategies and manage climate risks.
For Ethiopia, however, limited climate risk information is available to inform adaptation decisions. The study is implemented in cooperation with the United Nations University - Institute for Environment and Human Security (UNU-EHS) in the Afar and Somali regions in eastern Ethiopia, which are prone to extreme climate conditions. As the majority of these populations depend on the (agro-) pastoral lifestyle, the regions are highly susceptible to the expected impacts of climate change.
The results of the study support the Ministry of Agriculture in identifying cost-effective climate adaptation measures and developing their adaptation strategy, including risk transfer solutions.
Rapid Response Reef Risk Financing in the Mesoamerican Reef Region
The overall objective is to actively contribute to nature-based approaches as called for at the UN Climate Summit in September 2019. The project supports the conservation of the MAR region (Mexico, Belize, Guatemala and Honduras) by implementing a parametric insurance scheme for reefs to deliver quick financing for rapid response and reef restoration actions, after damages caused by hurricanes.
Reef insurance is an innovative financial mechanism that can contribute to reef restoration and recovery. The insurance element is part of a larger programme to build the long-term resilience of reefs as well as the livelihoods they support and protect along the entire Mesoamerican Reef.
Climate risk insurance to provide emergency liquidity in times of crises in Colombia
The aim of the insurance product is to bridge income losses and immediate liquidity needs after natural disasters for the affected target group.
The current COVID-19 pandemic shows once again the important role insurance plays in the event of loss of income due to business interruption. With the aim of reaching 300,000 beneficiaries by 2022, the project offers a holistic solution that stabilises the income of vulnerable households and thus strengthens their resilience.
