Climate and disaster risk finance and insurance (CDRFI) solutions can play an essential role in climate change adaptation, enabling governments, businesses, and individuals to protect their financial security in the event of shocks and providing information and incentives for improved management of risks. National Adaptation Plan (NAP) processes will guide investments in adaptation over the coming years, whether from domestic budgets, the private sector, or international climate finance. Having CDRFI solutions better reflected in NAP processes will increase awareness of the role of these financial tools in a country’s adaptation journey while providing a basis for quickly and effectively scaling up such solutions.
The analysis presented in this report provides a better understanding of the ways in which countries are integrating CDRFI solutions in their efforts to formulate and implement NAPs—as well as the missed opportunities. The analysis is a result of collaboration between the NAP Global Network and the InsuResilience Global Partnership (IGP) to support better integration of CDRFI solutions within NAP processes. The analysis is based on a systematic review of two types of documents: NAP documents and a sample of NAP readiness proposals to the Green Climate Fund (GCF).
The key findings of the analysis are as follows:
- The cost of climate and disaster risks is a factor driving adaptation in many countries.
- Most countries are drawing linkages between adaptation and disaster risk management (DRM).
- Insurance is the most identified CDRFI solution in NAP documents.
- Insurance is often seen as a tool for managing and transferring climate risks in the agriculture, livestock, and/or fisheries sectors.
- The insurance sector is viewed as a key partner for NAP implementation in many countries.
- Some countries recognize the value of social protection for adaptation.
- Improvement of data generation, management, and analysis is a priority in many countries.
The following recommendations target the institutions involved in coordinating and implementing the NAP process:
- Establish dialogue among adaptation actors, ministries of finance, and private sector CDRFI providers to identify mutual objectives and potential solutions.
- Engage with CDRFI providers to support application of risk analytics in decision making.
- Further explore how NAP processes can scale up adaptive social protection.
- Focus on ensuring equitable benefits from CDRFI solutions for all genders and social groups.