Linking climate risk insurance with shock-responsive social protection
Linking insurance with social protection systems could enhance households' and communities' ability to absorb climate shocks and improve their ability to reduce and manage risk. This policy brief by InsuResilience examines the opportunities and challenges that arise by linking these instruments.
Challenges presented in this policy brief include:
- Insurance and social protection have different target groups.
- Climate risk insurance and social protection schemes need to ensure they provide the right incentives for risk reduction and investing in long-term adaptation to climate change.
- As climate change increases the intensity and frequency of extreme weather events, there may come a time when some risks become so severe that insurance becomes too costly.