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Transforming strategies into insurance products

In many countries, natural disasters undermine sustainable development, lead to the loss of lives and livelihoods, and threaten earlier achievements in poverty reduction. Climate change is expected to increase the frequency and intensity of extreme weather events such as floods, storms and droughts. Climate risk insurance, as an essential element of comprehensive risk management, can mitigate these negative consequences by providing reliable and rapid financial support following extreme weather events.


The InsuResilience Solutions Fund promotes the development of innovative and sustainable climate risk insurance products in developing and emerging countries to improve the resilience of poor and vulnerable households against the impacts of climate change and natural disasters. It represents a pivotal delivery channel of the InsuResilience Global Partnership, a joint initiative of the G20 and V20 to increase the resilience of poor and vulnerable people.

The InsuResilience Solutions Fund has been established and funded by KfW Development Bank on behalf of the German Ministry for Economic Cooperation and Development (BMZ). Frankfurt School has been commissioned by KfW to manage the Fund and to implement its research and advisory activities.

Core services

The InsuResilience Solutions Fund seeks to increase the resilience and capacity of developing and emerging countries to adapt to climate change by:

  • supporting comprehensive climate risk analysis as the basis for governments, businesses and households to become more proactive in risk management and to make informed decisions on climate risk management and adaptation strategies;

Project example: Analysis of drought risk in Afar and Somali, Ethiopia

The ISF is currently conducting a climate risk analysis on drought in Ethiopia to identify and scale adaptation measures and costs. 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.

  • funding studies and advising the development of new concepts for climate risk insurance solutions that take into account the specific needs of the poor and vulnerable populations; and,

Project example: Rapid Response Reef Risk Financing in the Mesoamerican Reef Region

In preparation for the development of a reef insurance product in the Mesoamerican Reef (MAR) Region, the ISF funded two preparatory studies by Willis Towers Watson and MAR Fund. 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.

  • co-funding the development and market introduction of insurance products, as well as supporting the expansion of existing innovative climate risk insurance products.

Project example: Climate risk insurance to provide emergency liquidity in times of crises in Colombia

One example of an innovative climate risk insurance is the cooperation of the ISF with the Microinsurance Catastrophe Risk Organization (MiCRO) and SBS Colombia S.A. to develop an index-based insurance for micro-entrepreneurs 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.

Training services

The provision of training courses and capacity development on the topic of comprehensive climate risk management is another crucial part of our services.

We also offer the following training course within our Development Finance Academies:

The course will help participants understand the spectrum of solutions offered by innovative climate and disaster risk insurance products as an essential element of a comprehensive risk management strategy. Participants will be introduced to the process of product development as well as tools and models relevant for climate and disaster risk analysis, insurance product design and pricing. The course targets participants from the public and private sector responsible for climate and disaster risk management.



The insurance solutions introduced with ISF support provide financial protection for the most affected populations of climate impacts and disasters by tailoring products and services to the needs of poor and vulnerable households, small and medium-sized enterprises, humanitarian organisations and governments of developing and emerging economies.

Since its establishment in 2019, the InsuResilience Solutions Fund has already launched three Calls for Proposals that generated worldwide interest from both insurance companies and the public sector. To date, the Fund has received over 100 applications to support innovative climate risk insurance solutions.

Project Coordination Unit under the Tripartite Agreement

In September 2019 during the United Nations Secretary General’s Climate Action Summit, the German Federal Ministry for Economic Cooperation and Development (BMZ), the Insurance Development Forum (IDF) and the United Nations Development Programme (UNDP) announced a commitment to increase resilience for countries vulnerable to climate change and towards realising the Vision 2025 objectives of the InsuResilience Global Partnership. For more information visit the official site:

The partnership committed to provide funding, technical assistance and risk solutions to 20 vulnerable countries by 2025 through leveraging the strengths of the various parties and rallying global players towards a substantial scale-up in the use of risk financing mechanisms to deliver on global resilience and adaptation ambitions.

The InsuResilience Solutions Fund (ISF) is one of the vehicles through which the implementation of the joined agreement is supported.

An operational structure, the Project Coordination Unit (PCU), was established at the Frankfurt School, to facilitate the process of developing concepts for risk transfer solutions for sovereigns, sub-sovereigns and other public sector entities, as well as support project partnerships in compiling and submitting proposals for co-financing to the InsuResilience Solutions Fund.

The PCU facilitates the communication, coordination and collaboration among project partnership members when preparing a concept note or full project proposal documents for submission to the ISF.