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Insurance and risk transfer

The process of formally or informally shifting the financial consequences of particular risks from one party to another, whereby a household, community, enterprise or State authority will obtain resources from the other party after a disaster occurs, in exchange for ongoing or compensatory social or financial benefits provided to that other party. Risk insurance is a key disaster risk management activity.

This theme covers aspects of disaster risk financing, catastrophe bonds, financial resilience, and micro-insurance.

Latest Insurance & risk transfer additions in the Knowledge Base

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Flooded residential area with underwater cars and houses from hurricane Debby rainfall water in Laurel Meadows community in Sarasota, Florida.
Update
Geneva Association report calls for action to safeguard home insurance amid rising extreme weather risks

Global insured losses from natural catastrophes now regularly exceed USD 100 billion annually. A new report calls for an all-of-society effort to take action in the face of intensifying weather extremes.

International Association for the Study of Insurance Economics (Geneva Association)
Cover and source: Geneva Association
Documents and publications
Report: Safeguarding home insurance: Reducing exposure and vulnerability to extreme weather

This report presents a two-tier approach to safeguarding home insurance: scaling up local resilience measures and implementing structural reforms to align financial systems with real risk.

International Association for the Study of Insurance Economics (Geneva Association)
Cover and source: Global Shield Financing Facility
Documents and publications
Takaful technical note: Lessons learned from the use of parametric takaful for climate risk in the HoA DRIVE Project

This note highlights lessons learned on implementing parametric takaful to protect pastoralists against drought under the Horn of Africa De-Risking, Inclusion and Value Enhancement of Pastoral Economies (DRIVE) Project.

Global Shield Financing Facility
A cyclist rides past a destroyed car dealership in the aftermath of the 1994 Northridge earthquake
Update
Hurricanes and earthquakes could lead to global insured losses of USD 300 billion in a peak year, finds Swiss Re Institute

While loss severity is rising worldwide, the US accounted for almost 80% of global insured losses in 2024, due to vulnerability to different hazards. In the long-run globally, exposure is the main factor determining claims cost and premium rates.

Swiss Reinsurance Company (Swiss Re)
Floods streets in in Dakar, Senegal, 2012
Update
Flood protection in Pikine, Senegal

To address flood risk in Pikine, Senegal, the InsuResilience Solutions Fund (ISF) partnered with an international consortium led by AXA Climate to develop a flood insurance solution that will provide financial protection against severe flooding.

InsuResilience Solutions Fund
Case study
Lack of rainfall parametric cover for hydropower production
This product provides coverage to a hydropower company in Southern Africa for lost revenue when there is a cumulative lack of rainfall measured by satellite data and weather stations.
  • Insurance Development Forum
Case study
Skyline Partners: Protecting Jamaican Credit Unions from Tropical Cyclones with FatTrack™ Parametric Insurance: Timely Payouts During Hurricane Beryl
Skyline’s proprietary FatTrack™ methodology underpins a parametric insurance solution designed to safeguard the Jamaican Co-operative Credit Union League (JCCUL) against the financial risks posed by major hurricanes.
  • Insurance Development Forum
Case study
Mesoamerican Reef (MAR) Fund Insurance Programme
The Mesoamerican Reef (MAR) Fund aims to drive regional funding and partnerships for the conservation, restoration, and sustainable use of the Mesoamerican Reef.
  • Insurance Development Forum
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