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Added further explanation on Climate risk insurace. Expanded on the complications. Also added a new section that can list the different types of climate risk insurance and started that subheading with a "flood insurance" paragraph.
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'''Climate risk insurance''' is a type of [[insurance]] designed to mitigate the [[Climate risk|financial and other risk associated with climate change]], especially phenomena like [[extreme weather]].<ref name=":0">{{Cite web|title=7 things you need to know about climate risk insurance - Institute for Environment and Human Security|url=https://ehs.unu.edu/blog/5-facts/7-things-you-need-to-know-about-climate-risk-insurance.html|access-date=2020-11-08|website=ehs.unu.edu|language=en-US}}</ref><ref>{{Cite book|last=Hermann|first=Alexandra|url=https://www.allianz.com/content/dam/onemarketing/azcom/Allianz_com/migration/media/economic_research/publications/working_papers/en/ClimateRisk.pdf|title=Climate Risk Insurance: New Approaches and Schemes|last2=Koferl|first2=Peter|last3=Mairhofer|first3=Jan Phillip|publisher=[[Allianz]]|year=September 2016}}</ref> The insurance is often treated as a type of insurance needed for improving the [[climate resilience]] of poor and developing communities.<ref>{{Cite report|url=https://www.uncclearn.org/wp-content/uploads/library/mcii_propoor_161031_online.pdf|title=MAKING CLIMATE RISK INSURANCE WORK FOR THE MOST VULNERABLE: SEVEN GUIDING PRINCIPLES|date=2016|publisher=MUNICH CLIMATE INSURANCE INITIATIVE}}</ref><ref name=":1">{{Cite web|last=Welle (www.dw.com)|first=Deutsche|title=Climate risk: Insuring against the inevitable {{!}} DW {{!}} 07.12.2018|url=https://www.dw.com/en/climate-risk-insuring-against-the-inevitable/a-46615364|access-date=2020-11-08|website=DW.COM|language=en-GB}}</ref> Critics of the insurance, say that such insurance places the bulk of the economic burden on communities responsible for the least amount of [[carbon emission]]s.<ref name=":1" />
'''Climate risk insurance''' is a type of [[insurance]] designed to mitigate the [[Climate risk|financial and other risk associated with climate change]], especially phenomena like [[extreme weather]]<ref name=":0">{{Cite web|title=7 things you need to know about climate risk insurance - Institute for Environment and Human Security|url=https://ehs.unu.edu/blog/5-facts/7-things-you-need-to-know-about-climate-risk-insurance.html|access-date=2020-11-08|website=ehs.unu.edu|language=en-US}}</ref><ref>{{Cite book|last=Hermann|first=Alexandra|url=https://www.allianz.com/content/dam/onemarketing/azcom/Allianz_com/migration/media/economic_research/publications/working_papers/en/ClimateRisk.pdf|title=Climate Risk Insurance: New Approaches and Schemes|last2=Koferl|first2=Peter|last3=Mairhofer|first3=Jan Phillip|publisher=[[Allianz]]|year=September 2016}}</ref>. The insurance is often treated as a type of insurance needed for improving the [[climate resilience]] of poor and developing communities<ref>{{Cite report|url=https://www.uncclearn.org/wp-content/uploads/library/mcii_propoor_161031_online.pdf|title=MAKING CLIMATE RISK INSURANCE WORK FOR THE MOST VULNERABLE: SEVEN GUIDING PRINCIPLES|date=2016|publisher=MUNICH CLIMATE INSURANCE INITIATIVE}}</ref> <ref name=":1">{{Cite web|last=Welle (www.dw.com)|first=Deutsche|title=Climate risk: Insuring against the inevitable {{!}} DW {{!}} 07.12.2018|url=https://www.dw.com/en/climate-risk-insuring-against-the-inevitable/a-46615364|access-date=2020-11-08|website=DW.COM|language=en-GB}}</ref> <ref>{{Cite journal|last=Surminski|first=Swenja|last2=Bouwer|first2=Laurens M.|last3=Linnerooth-Bayer|first3=Joanne|date=2016-04|title=How insurance can support climate resilience|url=https://www.nature.com/articles/nclimate2979|journal=Nature Climate Change|language=en|volume=6|issue=4|pages=333–334|doi=10.1038/nclimate2979|issn=1758-6798}}</ref>. It provides post-disaster liquidity for relief and reconstruction measures while also preparing for the future measures in order to reduce vulnerability.


Critics of the insurance, say that such insurance places the bulk of the economic burden on communities responsible for the least amount of [[Carbon emission|carbon emissions]].<ref name=":1" /> For low-income countries, these insurance programmes can be expensive due to the high start-up costs and infrastructure requirements for the data collection.<ref name=":02">{{Cite book|last=Verfasser|first=Warner, Koko|url=http://worldcat.org/oclc/950715797|title=Innovative Insurance Solutions for Climate Change How to integrate climate risk insurance into a comprehensive climate risk management approach|oclc=950715797}}</ref> It is theorised that high-premiums in high risk areas experiencing increased climate threats, would discourage settlement in those areas.<ref name=":0" /> These programmes are also usually timely and financially inadequate, which could be an uncertainty to national budgets.<ref name=":02" /> A considerable problem on a micro-level is that weather-related disasters usually affect whole regions or communities at the same time, resulting in a large number of claims simultaneously.<ref name=":12">{{Cite web|last=Hermann|first=Alexandra|date=September 2016|title=Climate Risk Insurance: New Approaches and Schemes|url=https://www.allianz.com/content/dam/onemarketing/azcom/Allianz_com/migration/media/economic_research/publications/working_papers/en/ClimateRisk.pdf|url-status=live}}</ref> This means that it is needed to be sold on a very large, diversified scale.<ref name=":12" /> However a well-designed climate risk insurance can act as a safety net for countries while improving resilience. <ref>{{Cite journal|last=Surminski|first=Swenja|last2=Bouwer|first2=Laurens M.|last3=Linnerooth-Bayer|first3=Joanne|date=2016-04|title=How insurance can support climate resilience|url=https://www.nature.com/articles/nclimate2979|journal=Nature Climate Change|language=en|volume=6|issue=4|pages=333–334|doi=10.1038/nclimate2979|issn=1758-6798}}</ref><ref>{{Cite web|last=Kreft|first=Soenke|date=November 2017|title=Climate Risk Insurance for Resilience: Assessing Countries' Implementation Plans|url=http://collections.unu.edu/eserv/UNU:6321/MCII_DIE_171107_meta.pdf|url-status=live}}</ref>
Moreover, its theorized that high-premiums in high risk areas experiencing increased climate threats, would discourage settlement in those areas.<ref name=":0" />


The international community invested in developing further support for this kind of insurance through the [[InsuResilience Global Partnership]] launched at [[COP23]].<ref name=":1" /> That group, supports regional programs such as [[Climate Risk Adaptation and Insurance in the Caribbean]] (CRAIC) and international organizations like the [[Munich Climate Insurance Initiative]].<ref name=":1" /> The [[ACT Alliance]] published a guidebook for equitable and climate justice oriented model for climate risk insurance in 2020.<ref>{{Cite web|title=Climate Risk Insurance and Risk Financing in the Context of Climate Justice - A Manual for Development and Humanitarian Aid Practitioners - World|url=https://reliefweb.int/report/world/climate-risk-insurance-and-risk-financing-context-climate-justice-manual-development|access-date=2020-11-08|website=ReliefWeb|language=en}}</ref>
The international community invested in developing further support for this kind of insurance through the [[InsuResilience Global Partnership]] launched at [[COP23]].<ref name=":1" /> That group, supports regional programs such as [[Climate Risk Adaptation and Insurance in the Caribbean]] (CRAIC) and international organizations like the [[Munich Climate Insurance Initiative]].<ref name=":1" /> The [[ACT Alliance]] published a guidebook for equitable and climate justice oriented model for climate risk insurance in 2020.<ref>{{Cite web|title=Climate Risk Insurance and Risk Financing in the Context of Climate Justice - A Manual for Development and Humanitarian Aid Practitioners - World|url=https://reliefweb.int/report/world/climate-risk-insurance-and-risk-financing-context-climate-justice-manual-development|access-date=2020-11-08|website=ReliefWeb|language=en}}</ref>

== Types of climate risk insurance ==

=== Flood insurance ===
[[File:Flooded_building_and_tree_trunk_in_the_muddy_water_of_the_Mekong_in_Si_Phan_Don,_Laos,_September_2019.jpg|thumb|Flooded building in Si Phan Don, Laos, September 2019]]
The rising climate change related risks such as the [[sea level rise]], floods and windstorms threaten the liveability and affordability of the impacted areas. <ref name=":2">{{Cite journal|last=Cremades|first=R.|last2=Surminski|first2=S.|last3=Máñez Costa|first3=M.|last4=Hudson|first4=P.|last5=Shrivastava|first5=P.|last6=Gascoigne|first6=J.|date=2018-01|title=Using the adaptive cycle in climate-risk insurance to design resilient futures|url=https://www.nature.com/articles/s41558-017-0044-2|journal=Nature Climate Change|language=en|volume=8|issue=1|pages=4–7|doi=10.1038/s41558-017-0044-2|issn=1758-6798}}</ref> This is why one of the more widely used forms of climate risk insurance is [[flood insurance]], which provides coverage against loss caused by [[Flood|flooding]]. <ref name=":2" /> In the [[United States]], the [[National Flood Insurance Program]] (NFIP) enables property owners to purchase government administrated insurance protections.


== References ==
== References ==

Revision as of 07:12, 23 November 2021

Climate risk insurance is a type of insurance designed to mitigate the financial and other risk associated with climate change, especially phenomena like extreme weather[1][2]. The insurance is often treated as a type of insurance needed for improving the climate resilience of poor and developing communities[3] [4] [5]. It provides post-disaster liquidity for relief and reconstruction measures while also preparing for the future measures in order to reduce vulnerability.

Critics of the insurance, say that such insurance places the bulk of the economic burden on communities responsible for the least amount of carbon emissions.[4] For low-income countries, these insurance programmes can be expensive due to the high start-up costs and infrastructure requirements for the data collection.[6] It is theorised that high-premiums in high risk areas experiencing increased climate threats, would discourage settlement in those areas.[1] These programmes are also usually timely and financially inadequate, which could be an uncertainty to national budgets.[6] A considerable problem on a micro-level is that weather-related disasters usually affect whole regions or communities at the same time, resulting in a large number of claims simultaneously.[7] This means that it is needed to be sold on a very large, diversified scale.[7] However a well-designed climate risk insurance can act as a safety net for countries while improving resilience. [8][9]

The international community invested in developing further support for this kind of insurance through the InsuResilience Global Partnership launched at COP23.[4] That group, supports regional programs such as Climate Risk Adaptation and Insurance in the Caribbean (CRAIC) and international organizations like the Munich Climate Insurance Initiative.[4] The ACT Alliance published a guidebook for equitable and climate justice oriented model for climate risk insurance in 2020.[10]

Types of climate risk insurance

Flood insurance

Flooded building in Si Phan Don, Laos, September 2019

The rising climate change related risks such as the sea level rise, floods and windstorms threaten the liveability and affordability of the impacted areas. [11] This is why one of the more widely used forms of climate risk insurance is flood insurance, which provides coverage against loss caused by flooding. [11] In the United States, the National Flood Insurance Program (NFIP) enables property owners to purchase government administrated insurance protections.

References

  1. ^ a b "7 things you need to know about climate risk insurance - Institute for Environment and Human Security". ehs.unu.edu. Retrieved 2020-11-08.
  2. ^ Hermann, Alexandra; Koferl, Peter; Mairhofer, Jan Phillip (September 2016). Climate Risk Insurance: New Approaches and Schemes (PDF). Allianz.
  3. ^ MAKING CLIMATE RISK INSURANCE WORK FOR THE MOST VULNERABLE: SEVEN GUIDING PRINCIPLES (PDF) (Report). MUNICH CLIMATE INSURANCE INITIATIVE. 2016.
  4. ^ a b c d Welle (www.dw.com), Deutsche. "Climate risk: Insuring against the inevitable | DW | 07.12.2018". DW.COM. Retrieved 2020-11-08.
  5. ^ Surminski, Swenja; Bouwer, Laurens M.; Linnerooth-Bayer, Joanne (2016-04). "How insurance can support climate resilience". Nature Climate Change. 6 (4): 333–334. doi:10.1038/nclimate2979. ISSN 1758-6798. {{cite journal}}: Check date values in: |date= (help)
  6. ^ a b Verfasser, Warner, Koko. Innovative Insurance Solutions for Climate Change How to integrate climate risk insurance into a comprehensive climate risk management approach. OCLC 950715797. {{cite book}}: |last= has generic name (help)CS1 maint: multiple names: authors list (link)
  7. ^ a b Hermann, Alexandra (September 2016). "Climate Risk Insurance: New Approaches and Schemes" (PDF).{{cite web}}: CS1 maint: url-status (link)
  8. ^ Surminski, Swenja; Bouwer, Laurens M.; Linnerooth-Bayer, Joanne (2016-04). "How insurance can support climate resilience". Nature Climate Change. 6 (4): 333–334. doi:10.1038/nclimate2979. ISSN 1758-6798. {{cite journal}}: Check date values in: |date= (help)
  9. ^ Kreft, Soenke (November 2017). "Climate Risk Insurance for Resilience: Assessing Countries' Implementation Plans" (PDF).{{cite web}}: CS1 maint: url-status (link)
  10. ^ "Climate Risk Insurance and Risk Financing in the Context of Climate Justice - A Manual for Development and Humanitarian Aid Practitioners - World". ReliefWeb. Retrieved 2020-11-08.
  11. ^ a b Cremades, R.; Surminski, S.; Máñez Costa, M.; Hudson, P.; Shrivastava, P.; Gascoigne, J. (2018-01). "Using the adaptive cycle in climate-risk insurance to design resilient futures". Nature Climate Change. 8 (1): 4–7. doi:10.1038/s41558-017-0044-2. ISSN 1758-6798. {{cite journal}}: Check date values in: |date= (help)
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