Climate risk insurance

Insurance to mitigate the risks from climate change

Flooded building in Si Phan Don, Laos, September 2019

Climate risk insurance is a type of insurance designed to mitigate the financial and other risk associated with climate change, especially phenomena like extreme weather.[1][2][3] The insurance is often treated as a type of insurance needed for improving the climate resilience of poor and developing communities.[4][5][6] It provides post-disaster liquidity for relief and reconstruction measures while also preparing for the future measures in order to reduce climate change vulnerability. Insurance is considered an important climate change adaptation measure.

Critics of the insurance, say that such insurance places the bulk of the economic burden on communities responsible for the least amount of carbon emissions.[5] For low-income countries, these insurance programmes can be expensive due to the high start-up costs and infrastructure requirements for the data collection.[7] It is theorised that high-premiums in high risk areas experiencing increased climate threats, would discourage settlement in those areas.[1] These programmes are also usually timely and financially inadequate, which could be an uncertainty to national budgets.[7] A considerable problem on a micro-level is that weather-related disasters usually affect whole regions or communities at the same time, resulting in a large number of claims simultaneously.[8] This means that it is needed to be sold on a very large, diversified scale.[8] However a well-designed climate risk insurance can act as a safety net for countries while improving resilience.[6][9]

The international community invested in developing further support for this kind of insurance through the InsuResilience Global Partnership launched at COP23.[5] That group, supports regional programs such as Climate Risk Adaptation and Insurance in the Caribbean (CRAIC) and international organizations like the Munich Climate Insurance Initiative.[5] The ACT Alliance published a guidebook for equitable and climate justice oriented model for climate risk insurance in 2020.[10]

## Types of climate risk insurance

[edit]

Part of a series on

Climate change and
society

Effects · Risk

* Climate change mitigation
* Cities
* Urban heat island
* Eco-anxiety
* Ecological footprint
* Ecological grief
* Effects of climate change on human health
* Environmental
* Conflict
* Degradation
* Effects of aviation
* Impacts of agriculture
* Extreme weather
* Drought
* Flood
* Heat wave
* Storm surge
* Tropical cyclones
* Wildfire
* Food security
* Agriculture
* Desertification
* Fisheries
* Livestock
* Infectious diseases
* Mental health/Psychology
* List of environmental conflicts
* Sea level rise
* Coastal erosion
* Coastal flooding
* Small island countries
* Water security
* Water cycle
* Water scarcity

Economics · Finance

* Autonomous building
* Bright green environmentalism
* Carbon footprint
* Carbon accounting
* Carbon offsets and credits
* Global warming potential
* Greenhouse gas inventory
* Net zero emissions
* Carbon price
* Carbon bubble
* Carbon emission trading
* Carbon fee and dividend
* Carbon tax
* Social cost of carbon
* Circular economy
* Clean growth
* Climate change scenario
* Climate finance
* Corporate environmental responsibility
* Corporate sociopolitical activism
* Corporate sustainability
* Degrowth
* Eco-city
* Ecological economics
* Ecovillage
* Energy economics
* Environmental design
* Environmental finance
* ESG
* Ethical banking
* Green accounting
* Green bank
* Green bond
* Green bubble
* Green building
* Green building and wood
* Green economy
* Green home
* Green recovery
* Greening
* Insurance
* Act of God
* Extreme event attribution
* Resilience
* Risk management
* Vulnerability
* Low-carbon economy
* Mitigation economics
* Natural building
* Reuse
* Sustainable
* Agriculture
* Architecture
* Capitalism
* City
* Consumer behaviour
* Diet
* Finance
* Industries
* Livelihood
* Sourcing
* Used good
* Zero-energy building
* Zero heating building

Social issues · Ethics

* Children
* Climate justice
* Debt
* Cyclability
* Deep ecology
* Dirty hands
* Ecosophy
* Environmental racism
* Environmentalism
* Ethical consumerism
* Fossil fuel divestment
* Gender
* Greenwashing
* Human rights
* Indigenous peoples
* Just transition
* List of climate change controversies
* Migration
* Mitigation co-benefits
* Poverty
* Psychology of climate change denial
* Public interest design
* Queer ecology
* Security
* Social ecology (ethics)
* Social responsibility
* Stewardship (theology)
* Urban forest inequity
* Walkability
* Women

Communication

* Climate crisis
* Education
* Greenwashing
* Media coverage
* Popular culture
* fiction
* art
* Psychology of denial
* Public opinion
* Scientific consensus on climate change

Politics

* Climate movement
* Eco-capitalism
* Green left
* Green liberalism
* Eco-socialism
* Green politics
* History
* Political economy
* Climate governance
* Climate movement
* Conspiracy theories
* Denial
* Global warming controversy
* Litigation
* Individual actions
* UNFCCC
* UN conferences
* Kyoto Protocol
* Paris Agreement

* Portal
* Glossary
* Index

* v
* t
* e

### Flood insurance

[edit]

The rising climate change related risks, such as sea level rise, floods and windstorms, threaten the livability and affordability of the impacted areas.[11] This is why one of the more widely used forms of climate risk insurance is flood insurance, which provides coverage against loss caused by flooding.[11]

## References

[edit]

1. ^ a b "7 things you need to know about climate risk insurance - Institute for Environment and Human Security". ehs.unu.edu. Retrieved 2020-11-08.
2. ^ Kousky, Carolyn (5 October 2019). "The Role of Natural Disaster Insurance in Recovery and Risk Reduction". Annual Review of Resource Economics. 11 (1): 399–418\. doi:10.1146/annurev-resource-100518-094028. ISSN 1941-1340. S2CID 159178389.
3. ^ Hermann, Alexandra; Koferl, Peter; Mairhofer, Jan Phillip (September 2016). Climate Risk Insurance: New Approaches and Schemes (PDF). Allianz.
4. ^ MAKING CLIMATE RISK INSURANCE WORK FOR THE MOST VULNERABLE: SEVEN GUIDING PRINCIPLES (PDF) (Report). MUNICH CLIMATE INSURANCE INITIATIVE. 2016.
5. ^ a b c d Welle (www.dw.com), Deutsche. "Climate risk: Insuring against the inevitable | DW | 07.12.2018". DW.COM. Retrieved 2020-11-08.
6. ^ a b Surminski, Swenja; Bouwer, Laurens M.; Linnerooth-Bayer, Joanne (April 2016). "How insurance can support climate resilience". Nature Climate Change. 6 (4): 333–334\. Bibcode:2016NatCC...6..333S. doi:10.1038/nclimate2979. ISSN 1758-6798.
7. ^ a b Warner, Koko. Innovative Insurance Solutions for Climate Change How to integrate climate risk insurance into a comprehensive climate risk management approach. OCLC 950715797.
8. ^ a b Hermann, Alexandra (September 2016). "Climate Risk Insurance: New Approaches and Schemes" (PDF). Archived (PDF) from the original on 2020-11-13.
9. ^ Kreft, Soenke (November 2017). "Climate Risk Insurance for Resilience: Assessing Countries' Implementation Plans" (PDF). Archived (PDF) from the original on 2019-12-20.
10. ^ "Climate Risk Insurance and Risk Financing in the Context of Climate Justice - A Manual for Development and Humanitarian Aid Practitioners - World". ReliefWeb. 6 November 2020. Retrieved 2020-11-08.
11. ^ a b Cremades, R.; Surminski, S.; Máñez Costa, M.; Hudson, P.; Shrivastava, P.; Gascoigne, J. (January 2018). "Using the adaptive cycle in climate-risk insurance to design resilient futures". Nature Climate Change. 8 (1): 4–7\. Bibcode:2018NatCC...8....4C. doi:10.1038/s41558-017-0044-2. ISSN 1758-6798. S2CID 90343311.

* v
* t
* e

Climate change

Overview

* Causes of climate change
* Effects of climate change
* Climate change mitigation
* Climate change adaptation
* By country and region

Causes

| Overview|

* Climate system
* Greenhouse effect (Carbon dioxide in Earth's atmosphere)
* Scientific consensus on climate change

|

Sources|

* Deforestation
* Fossil fuel
* Greenhouse gases
* Greenhouse gas emissions
* Carbon accounting
* Carbon footprint
* Carbon leakage
* from agriculture
* from wetlands
* World energy supply and consumption

History

* History of climate change policy and politics
* History of climate change science
* Svante Arrhenius
* James Hansen
* Charles David Keeling
* United Nations Climate Change conferences
* Years in climate change
* 2019
* 2020
* 2021
* 2022
* 2023
* 2024

Effects and issues

| Physical|

* Abrupt climate change
* Anoxic event
* Arctic methane emissions
* Arctic sea ice decline
* Atlantic meridional overturning circulation
* Drought
* Extreme weather
* Flood
* Coastal flooding
* Heat wave
* Marine
* Urban heat island
* Oceans
* acidification
* deoxygenation
* heat content
* sea surface temperature
* stratification
* temperature
* Ozone depletion
* Permafrost thaw
* Retreat of glaciers since 1850
* Sea level rise
* Season creep
* Climate sensitivity
* Tipping points in the climate system
* Tropical cyclones
* Water cycle
* Wildfires

|

Flora and fauna|

* Biomes
* Mass mortality event
* Birds
* Extinction risk
* Forest dieback
* Invasive species
* Marine life
* Plant biodiversity

Social and economic|

* Agriculture
* Livestock
* Multi-breadbasket failure
* United States
* Children
* Cities
* Civilizational collapse
* Crime
* Depopulation of settlements
* Destruction of cultural heritage
* Disability
* Economic impacts
* U.S. insurance industry
* Fisheries
* Gender
* Health
* Mental health
* Human rights
* Indigenous peoples
* Infectious diseases
* Migration
* Poverty
* Psychological impacts
* Security and conflict
* Urban flooding
* Water scarcity
* Water security

By country and region|

* Africa
* Americas
* Antarctica
* Arctic
* Asia
* Australia
* Caribbean
* Europe
* Middle East and North Africa
* Small island countries
* by individual country

Mitigation

| Economics and finance|

* Carbon budget
* Carbon emission trading
* Carbon offsets and credits
* Gold Standard (carbon offset standard)
* Carbon price
* Carbon tax
* Climate debt
* Climate finance
* Climate risk insurance
* Co-benefits of climate change mitigation
* Economics of climate change mitigation
* Fossil fuel divestment
* Green Climate Fund
* Low-carbon economy
* Net zero emissions

|

Energy|

* Carbon capture and storage
* Energy transition
* Fossil fuel phase-out
* Nuclear power
* Renewable energy
* Sustainable energy

Preserving and enhancing
carbon sinks|

* Blue carbon
* Carbon dioxide removal
* Carbon sequestration
* Direct air capture
* Carbon farming
* Climate-smart agriculture
* Forest management
* afforestation
* forestry for carbon sequestration
* REDD and REDD+
* reforestation
* Land use, land-use change, and forestry (LULUCF and AFOLU)
* Nature-based solutions

Other|

* Individual action on climate change
* Geoengineering

Society and adaptation

| Society|

* Business action
* Climate action
* Climate emergency declaration
* Climate movement
* School Strike for Climate
* Denial
* Ecological grief
* Governance
* Justice
* Litigation
* Politics
* Public opinion
* Women

|

Adaptation|

* Adaptation strategies on the German coast
* Adaptive capacity
* Air conditioning paradox
* Disaster risk reduction
* Ecosystem-based adaptation
* Flood control
* Loss and damage
* Managed retreat
* Nature-based solutions
* Resilience
* Risk
* Vulnerability
* The Adaptation Fund
* National Adaptation Programme of Action

Communication|

* Climate Change Performance Index
* Climate crisis (term)
* Climate spiral
* Education
* Media coverage
* Popular culture depictions
* art
* fiction
* video games
* Warming stripes

International agreements|

* Glasgow Climate Pact
* Kyoto Protocol
* Paris Agreement
* Cooperative Mechanisms under Article 6 of the Paris Agreement
* Nationally determined contributions
* Sustainable Development Goal 13
* United Nations Framework Convention on Climate Change

Background and theory

| Measurements|

* Global surface temperature
* Instrumental temperature record
* Proxy
* Satellite temperature measurement

|

Theory|

* Albedo
* Carbon cycle
* atmospheric
* biologic
* oceanic
* permafrost
* Carbon sink
* Climate sensitivity
* Climate variability and change
* Cloud feedback
* Cloud forcing
* Fixed anvil temperature hypothesis
* Cryosphere
* Earth's energy budget
* Extreme event attribution
* Feedbacks
* Global warming potential
* Illustrative model of greenhouse effect on climate change
* Orbital forcing
* Radiative forcing

Research and modelling|

* Climate change scenario
* Climate model
* Coupled Model Intercomparison Project
* Intergovernmental Panel on Climate Change (IPCC)
* IPCC Sixth Assessment Report
* Paleoclimatology
* Representative Concentration Pathway
* Shared Socioeconomic Pathways

* Climate change portal
* Category
* Glossary
* Index

* v
* t
* e

Insurance

Types of
insurance|

| Health|

* Accident
* Accidental death and dismemberment
* Dental
* Disability
* Total permanent disability
* Business overhead expense
* Income protection
* Long-term care
* National health
* Payment protection

|

Life|

* Longevity insurance
* Mortgage life
* Term life
* Unitised fund
* Universal life
* Variable universal life
* Whole life

Business|

* Bond
* Business interruption
* Business owner
* Collateral protection
* Directors and officers liability
* Fidelity
* Over-redemption
* Payment protection
* Pollution
* Professional liability
* Protection and indemnity
* Surety
* Trade credit
* Umbrella

Residential|

* Boiler
* Builder's risk
* Contents
* Earthquake
* Flood
* Home
* Landlords'
* Lenders mortgage
* Mortgage
* Property
* Renters'
* Title

Transport/
Communication|

* Aviation
* GAP insurance
* Inland marine
* Public auto
* Marine
* Satellite
* Shipping
* Travel
* Vehicle

Other|

* Reinsurance
* Catastrophe bond
* Insurance-linked securities
* Casualty
* Climate risk
* Crime
* Crop
* Catastrophic
* Multi-peril
* Cyber
* Deposit
* Expatriate
* Extended warranty
* Group
* Index-based
* Parametric
* Interest rate
* Kidnap and ransom
* Legal expenses
* Liability
* No-fault
* Pet
* Political risk
* Prize indemnity
* Takaful
* Terrorism
* Tuition
* War risk
* Weather
* Workers' compensation

Insurance
policy
and law|

* Act of God
* Actuarial science
* Actuary
* Adverse selection
* Risk
* Risk assessment
* Risk management
* Uncertainty/Knightian
* Value of life
* Actual cash value
* Cash value
* Broker
* Cancellation
* Pro rata
* Short rate table
* Claim
* Claims adjuster
* Deductible
* Co-insurance
* Copayment
* Out-of-pocket expense
* Explanation of benefits
* Force majeure
* General average
* Indemnity
* Insurability
* Insurable interest
* Insurance fraud
* Proximate cause
* Replacement value
* Risk pool
* Self-insurance
* Total loss
* Underinsurance
* Underwriting
* Profit

Insurance
by country|

* Australia
* China
* India
* Pakistan
* Serbia
* United Kingdom
* United States
* Climate change
* Health insurance
* Health insurance costs
* Health insurance coverage
* Vehicle insurance

History|

* Mesopotamian banker
* Code of Hammurabi
* §100–105; §126; §234; §235–238; §240; §275–277
* Collegium
* Burial society
* Guild
* Corpus Juris Civilis
* Digesta
* Syndicate
* Benefit/Friendly society
* Cooperative
* Cooperative banking
* Credit union
* Fraternal order
* Mutual organization
* Mutual savings bank
* Rochdale Principles
* Savings and loan association
* Social insurance
* Trade union
* Insurance cycle

* Category
* List of topics

This article about climate change is a stub. You can help Wikipedia by expanding it.

See guidelines for writing about climate change. Further suggestions might be found on the article's talk page.

|

* v
* t
* e

*[v]: View this template
*[t]: Discuss this template
*[e]: Edit this template