Climate insurance and water-related disaster risk management: Unlikely partners in promoting development?

Cashman, Adrian, Souvignet, Maxime, Schuster, Sandra and Zwick, Sabrina, (2018). Climate insurance and water-related disaster risk management: Unlikely partners in promoting development?. Global Water Partnership, 1-32

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Article
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UNU-EHS Working papers

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  • Sub-type Journal article
    Author Cashman, Adrian
    Souvignet, Maxime
    Schuster, Sandra
    Zwick, Sabrina
    Title Climate insurance and water-related disaster risk management: Unlikely partners in promoting development?
    Appearing in Global Water Partnership
    Publication Date 2018-01
    Place of Publication Geneva
    Publisher Global Water Partnership
    Start page 1
    End page 32
    Language eng
    Abstract The number of natural disasters of all types appears to have increased in the last few decades though there is some debate over the evidence for this. What is clear though is that the economic costs associated with extreme weather events have increased. For lesser-developed countries the developmental outcomes have been particularly severe. Recent research indicates that between 1990 and 2015, most economic losses resulted from flooding: around 40% of the total (Daniell, Wenzel, and Schaefer, 2016). Better flood management by governments, for example by China and Japan, seems to have resulted in reduced flood-related losses. Better disaster response and better building and infrastructure have reduced the relative costs in many developed countries. However, for developing countries the necessary regulations and investments are not in place, resulting in them being disproportionately affected when disasters do strike (UNISDR, 2010; Surminski and Oramas-Dorta, 2014). As the global climate shifts and changes the frequency and intensity of natural disasters, they are expected to increase. It is, therefore, not surprising that there has been increasing interest among the global community in financing adaptation measures and the means to mobilise investments. In this context, there is a developing discourse emerging from recent Conferences of the Parties around loss and damage, risk-insurance facilities, climate-risk pooling, and other insurance solutions. The insurance industry is increasingly aware of the emerging challenges associated with disasters and climate change. An emphasis on loss and damage by itself runs the risk of limiting this risk to being reactive and compensatory as opposed to promoting measures that contribute to risk-reduction strategies and affirmative action. The scope for the development of products that provide an incentive for proactive policies and interventions poses a particular challenge in developing countries. This is in part due to weak and indebted economies, income disparities, and the often less than equitable provision of basic services. Many products and initiatives have been developed, but it is not always clear what their effects have been and to what extent they prompt actions to reduce climate risks and build resilience (Gerber and Mirzabaev, 2017). It is necessary to explore the question of how climate-related risk-transfer mechanisms, including insurance, can mobilise water-related disaster risk reduction investments and, by so doing, contribute to development. As the focus is on risk transfer, this paper will cover its role in promoting actions and measures that contribute to the reduction of loss and damage caused by water-related events and, by extension, disaster risk-reduction measures that provide protection from extreme weather events. This paper does not set out to provide solutions or answers to that question. Rather, it seeks to promote a discussion between the insurance and water sectors around this question.
    UNBIS Thesaurus RISK MANAGEMENT
    FLOODS
    DROUGHT
    Keyword Climate Risk Insurance
    Water resources
    water availability
    IWRM
    Copyright Holder Global Water Partnership
    Copyright Year 2018
    Copyright type Fair use permitted
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    Created: Tue, 05 Jun 2018, 18:02:47 JST by Aarti Basnyat on behalf of UNU EHS