Document / Publication
United Nations - Headquarters (UN)
This report presents the progress made since the 2014 climate summit in private sector climate finance. It argues that the private sector has made significant strides in response to the challenge posed by climate change and has led the effort so far, but that now it is time for the policy makers to take action in order to accelerate the pace of private sector investment and engagement.
According to the report, there has been a steady rise across both developed and developing countries in the number of lives and value of assets insured, and an improvement in risk reduction and disaster response measures. This has been enabled by more sophisticated tools for understanding the causes of risk and vulnerability, and by a range of expanding products and approaches, such as sovereign risk pooling, micro-insurance, catastrophe bonds and index-based insurance.
However, the report notes that despite these developments, key challenges remain. Crucially, insured losses remain low in many developing countries. Moreover, the core challenge of climate change risk - the gradually and steadily increasing levels of risk - are only starting to be addressed through integrated risk management and insurance approaches. Information critical to progress is still not as robustly available as it might be, especially data on the socio-economic drivers of disaster risk, and even basic risk information in some regions. There is also a fundamental lack of information about how effective various disaster reduction and response measures are, so insurance premiums could potentially be reduced for those regions taking progressive action.