Insurance, developing countries, and climate change

Linnerooth-Bayer, Joanne, Warner, Koko, Bals, Christoph, Höppe, Peter, Burton, Ian, Loster, Thomas and Haas, Armin, (2009). Insurance, developing countries, and climate change. The Geneva Papers on Risk and Insurance – Issues and Practice, 34(Special issue on Climate Change and its Economic Impact on Insurance), 381-400

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  • Sub-type Magazine article
    Author Linnerooth-Bayer, Joanne
    Warner, Koko
    Bals, Christoph
    Höppe, Peter
    Burton, Ian
    Loster, Thomas
    Haas, Armin
    Title Insurance, developing countries, and climate change
    Appearing in The Geneva Papers on Risk and Insurance – Issues and Practice
    Volume 34
    Issue No. Special issue on Climate Change and its Economic Impact on Insurance
    Publication Date 2009
    Place of Publication Hants
    Publisher Palgrave Macmillan
    Start page 381
    End page 400
    Language eng
    Abstract By providing financial security against droughts, floods, tropical cyclones and other forms of weather extremes, insurance instruments present an opportunity for developing countries in their concurrent efforts to reduce poverty and adapt to climate change. By pricing risk, insurance provides incentives for reducing risks and adapting to climate change; if these premiums are not affordable to the most vulnerable, donors can combine premium support with risk-reduction measures. In this paper, we examine the costs, benefits and risks of public-private (and donor supported) insurance programmes that offer affordable economic security to vulnerable communities and governments. Insurance mechanisms are of particular interest to climate negotiators seeking strategies that help vulnerable countries adapt to increasing severity and frequency of weather disasters, and we examine the case for including insurance mechanisms in a climate adaptation strategy expected to be agreed in Copenhagen in 2009. We present a proposal for this purpose that has been recently put forward by the Munich Climate Insurance Initiative (MCII), which calls for international solidarity for very low probability and high consequence weather-related events (high-risk layer). For middle-layer risks the MCII proposal calls for international support to promote sustainable, affordable and incentive-compatible insurance programmes that serve the poor without crowding out private sector involvement.
    Keyword Climate adaptation
    Risk reduction
    Copyright Holder Palgrave Macmillan
    Copyright Year 2009
    Copyright type All rights reserved
    DOI 10.1057/gpp.2009.15
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    Created: Thu, 30 Apr 2015, 12:48:14 JST