Loss and damage protection BMZ achievements in climate and disaster risk finance and insurance

Pre-arranged finance mechanisms improve people's protection against climate-related losses and damages, thus strengthening their financial resilience against the adverse effects of climate change. Disbursements can provide rapid assistance in an emergency and prevent impoverishment, hunger and indebtedness.

During its G7 Presidency, Germany, together with the V20 (Vulnerable Twenty, an alliance of countries particularly vulnerable to climate change), launched the Global Shield against Climate Risks. The Shield brings together activities in the field of climate risk finance and preparedness, enabling people and authorities to access urgently needed assistance more easily and more quickly when disaster strikes.

The Shield builds upon the InsuResilience Global Partnership (External link), which works towards comprehensive and active climate risk management worldwide. The Partnership facilitates cooperation among governments, the private sector, multilateral institutions, civil society organisations and research institutes.

German activities Permanent protection for particularly vulnerable people

During its G20 Presidency in 2017, Germany joined forces with the UK, Fiji, Ethiopia and the World Bank to launch the InsuResilience Global Partnership as a joint G20 and V20 (External link) initiative. In its ambitious Vision 2025 (External link), the Partnership has adopted the goal of increasing the climate risk and disaster resilience of the most vulnerable populations in developing countries and emerging economies.

The Global Shield against Climate Risks, which was established at the 2022 climate conference, builds on this goal and on Vision 2025, making use of the experience and of the networks, bodies and mechanisms of the Partnership. The Shield pursues a coordinated, inclusive approach which brings all major stakeholders together, under the lead of the respective partner governments, to engage in a comprehensive process of analysis and consultancy. This approach is intended to make cover against climate risks more systematic, better coordinated and more permanent compared to previous instruments.

The aspiration is to use pre-arranged finance to provide better coverage against climate risks for an even greater number of vulnerable people and countries, closing coverage gaps permanently in a step-by-step process. This is being implemented through the Shield's central funding structure, which consists of the Global Shield Solutions Platform (External link) (GSSP), the Global Shield Financing Facility (External link) (GSFF) and the Climate Vulnerable Forum & V20 Joint Multi-Donor Fund (External link) (JMDF).

Finance and insurance solutions

Here is an overview of the finance and insurance solutions that are offered under the umbrella of the Global Shield and/or the InsuResilience Global Partnership. They provide a broad range of solutions for coverage against extreme weather events and can be used in a complementary manner.

Global Shield Financing Facility (GSFF)Internal link

The Global Shield Financing Facility (GSFF) was set up in order to enhance the financial resilience of vulnerable people in developing countries against natural disasters. It is one of the three financing vehicles under the Global Shield against Climate Risks.
Global Shield Solutions Platform (GSSP)Internal link

The Global Shield Solutions Platform (GSSP) is a multi-donor grant facility and one of the financing vehicles under the Global Shield against Climate Risks.
Caribbean Catastrophe Risk Insurance Facility (CCRIF)Internal link

The Caribbean Catastrophe Risk Insurance Facility (CCRIF) offers coverage against hurricanes, earthquakes and heavy rains. Its assistance goes beyond the payment of insurance benefits. Countries also receive technical assistance for reconstruction.
Global Index Insurance Facility (GIIF)Internal link

The Global Index Insurance Facility (GIIF) supports the expansion of agricultural insurance to protect vulnerable people against extreme weather events.
InsuResilience Solutions Fund (ISF)Internal link

The InsuResilience Solutions Fund (ISF) is a key implementation programme of the InsuResilience Global Partnership. It supports the development of innovative insurance products in developing and emerging economies in order to cushion the impact of climate change.
InsuResilience Investment Fund (IIF)Internal link

The purpose of the InsuResilience Investment Fund (IIF) is to improve access to and the uptake of insurance in developing countries. This is intended to reduce the vulnerability of micro, small and medium enterprises (MSMEs), smallholders and low-income households to extreme weather events.
Natural Disaster Fund (NDF)Internal link

The Natural Disaster Fund (NDF) offers developing countries appropriate solutions that are based on scientific weather models, actuarial methods, and risk transfer instruments.

Cooperation in action

Africa: Cooperation in action

Insurance policies against drought effects – ARC and ARC ReplicaInternal link

The African Risk Capacity (ARC) and ARC Replica provide support to African countries' efforts for better drought preparedness and offer them protection against financial losses from drought. This facilitates quick and effective assistance.
Pakistan: Local micro insurance

InsuResilience Investment Fund provides support for local institutionsInternal link

With support from the InsuResilience Investment Fund (IIF), a local foundation in Pakistan offers farmers a chance to combine micro loans for livestock purchases with climate risk insurance.
India: InsuResilience Solutions Fund

Insurance against natural disasters for the Indian state of NagalandInternal link

The InsuResilience Solutions Fund is supporting the development of an insurance scheme that boosts the financial capacity of the State of Nagaland in the event of disaster.

As at: 23/10/2024