November 15, 2017, 11:02 am
Germany on Tuesday pledged $125 million to boost the work of an international insurance partnership that aims to cover 400 million more poor and vulnerable people against disaster risks by 2020.
That goal was first set in 2015 by the G7 group of wealthy nations, but the effort has now been expanded to bring in other partners, including the World Bank and an alliance of about 50 countries vulnerable to climate threats, including small island states like Fiji, which is presiding over the talks in Bonn.
In July, Britain contributed 30 million pounds ($39.4 million) to establish a Centre for Global Disaster Protection.
Fiji’s prime minister, Frank Bainimarama, said that when powerful Cyclone Winston hit his nation last year, wiping out 30 percent of its economy, tens of thousands of homes were damaged or destroyed, and many households were uninsured.
“People protected by their wealth have no idea of the heartbreak of the poor and most vulnerable when they lose their homes and livelihoods in climate-related disasters,” he told an event to launch the partnership.
Fiji needs new forms of finance to develop while also reducing the risks of weather extremes and rising seas to tourism, forests, fisheries and agriculture, as well as to infrastructure, much of which is exposed on the coast, he said.
The InsuResilience Global Partnership will develop and roll out innovative finance and insurance solutions for individual countries tailored to the needs and challenges of their poor people in particular, it said.
Those will include sovereign risk pools like the Caribbean Catastrophe Risk Insurance Facility (CCRIF), which has paid out $62 million to 10 Caribbean countries since hurricanes Irma and Maria brought destruction to the island states in September.
Using the additional funds announced Tuesday on the sidelines of the U.N. climate talks in Bonn, the global partnership will also aim to expand schemes such as the NWK Agri-Services cotton company in Zambia, which offers weather and life insurance to small contract farmers and is already backed by InsuResilience.
In 2015, some 52,000 farmers bought insurance, of whom more than 23,000 received payments after a major drought in 2016. Allen Chastanet, prime minister of St. Lucia, said the CCRIF had proved to be “an amazing asset”, enabling quick access to funds after a disaster. But it was just as important to provide money to help Caribbean nations adapt to climate change to help prevent catastrophic losses, he said.
“Insurance is not dealing with the overall solution. It is dealing with the symptom, not the actual cause,” he said.
Aid agencies working in developing countries to reduce the risks of disasters said the partnership must also look at ways to help vulnerable communities prepare better for climate threats, besides providing insurance.
“Insurance doesn’t actually reduce risk, and it could be unaffordable for the communities it’s meant to cover,” said Tracy Carty, head of Oxfam’s delegation at the Bonn conference.