Transcript Meeting the Unmet Demand

Meeting the Unmet Demand
Insuring the Uninsurable
Climate Change and Insurance
Munich Re – GERMANWATCH
Briefing 2004
Arun Kashyap
Climate Change & CDM Adviser
UNDP
10 May 2004
Presentation Format

Underlying Principle


Possible Strategy &
Interventions



Why, What, How
Debt Swaps
Linking disaster assistance with
prevention/mitigation of adverse
impacts of disasters
Next Steps
Underlying Principle – Why?

Millennium Development Goal
 Halve the proportion of people living in
extreme poverty by 2015

Water, Energy, Health, Agriculture
Biodiversity (WEHAB)
&
Climate Change - a cross cutting issue
Possible basis for provision of
insurance services
Hypotheses
 Disasters contribute to persistent poverty
 Reducing vulnerability is about risk
reduction and risk management
 Sustainable livelihood implies reduced
vulnerabilities
 Disasters reduction efforts make
economic and development sense
 Insurance as a safety net mechanism
can contribute towards overall
economic development
Enhanced Vulnerability
 Climate variability and change
significantly endanger livelihoods
 Increase in the frequency and
intensity of extreme events
 Natural disasters
 Frequency and intensity of droughts
 High human and economic costs
in Developing Countries
Focus of Interventions -What?


Reducing vulnerability to shocks
and stresses
Strengthening sustainable
livelihoods
Access to resources
Building Assets
Developing capabilities
Focus of Interventions –
How?


Adaptation (Risk management) interventions
must be integrated in to national
strategies for poverty eradication
Translating new and existing knowledge
into policy formulation and
implementation
Innovative and integrative approaches to
capacity development
Undertake Pilot Projects
Possible Interventions
Disaster Management Continuum
 Priority
 Disaster Reduction
(Prevention, Mitigation and Preparedness)
 Follow up  Disaster Response
(Relief, Rehabilitation, Reconstruction)
Debt for Adaptation Swaps
(MDG)
Debt Swaps
Public Private Engagement
 National Host Governments (Sustainable
development priorities
 Bilateral (debt write off and terms of
reference)
 Private Sector (Insurance possibilities –
premiums nature of contracts)
 Multilateral organizations (Due Diligence)
 Civil Society (Due Diligence)
Learning by doing
Disaster Reduction
Public Private Engagement
 National Host Governments (sustainable
development priorities)
 Bilateral (Resource advancement from
disaster mitigation budget)
 Fulfilling Monterey commitment
 Engaging the Private Sector (Insurance possibilities)
 Linking local action to global mandates
 Transparency, Monitoring and
Evaluation
Premise for Insurance
 Community/province/state level rather than
household
 Guaranteed premium payment
 Diversification of risk
 Partial Coverage of extreme events/natural
disasters
 Lessons from developed countries
 New Insurance products
 Commercial debt insurance
Next Steps
 Strengthen Insurance & Sustainable
Development linkage
 Relationship: risk management,
insurance and adaptive capacity
 Foster dialogue: Re/insurance industry,
governments and civil society
 Seek partnerships
Next Steps: Barbados+10
Risk Management, Adaptation
and Insurance for SIDS
 Comprehensive paper
 Side Event
 MoU
 Pilot Projects
Selection of Pilot Countries
 LDC/Highly Indebted
 Presence of basic infrastructure
 Insurance industry
 Enabling policy framework
 Political commitment
 Private sector/bilateral interest
 Direct Foreign Investment/Commercial
Debt
 Replicability