Climate risk insurance

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. The insurance is often treated as a type of insurance needed for improving the climate resilience of poor and developing communities. 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.

Moreover, its theorized that high-premiums in high risk areas experiencing increased climate threats, would discourage settlement in those areas.

The international community invested in developing further support for this kind of insurance through the InsuResilience Global Partnership launched at COP23. 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. The ACT Alliance published a guidebook for equitable and climate justice oriented model for climate risk insurance in 2020.