German government to enhance sovereign risk and resilience insight in partnership with the Insurance Development Forum and V20 climate-vulnerable countries
As the IPCC is set to publish its findings on climate change adaptation, the German government commits an additional EUR 21 million to enhancing resilience to climate risks and improving climate risk analytics. Germany’s partners in implementing these programmes are the V20, a finance ministers alliance of climate-vulnerable countries, and the Insurance Development Forum, a public-private partnership with the insurance industry. The funding will be administered via KfW´s InsuResilience Solutions Fund (ISF) with EUR 11 million going towards the establishment of the Global Risk Modelling Alliance (GRMA) and EUR 10 million for premium financing for countries.
Berlin, London and Dhaka, 28 February 2022: The adverse effects of climate change are increasingly threatening the security and livelihoods of countries around the globe. The upcoming Sixth Assessment Report (AR6) of the Intergovernmental Panel on Climate Change (IPCC) – published on 28 February 2022 – will highlight the urgent demand for climate change adaptation measures. In support of calls from the Insurance Development Forum (IDF) and the V20 Group of Ministers of Finance from 48 climate-vulnerable countries, the German Federal Ministry for Economic Cooperation and Development (BMZ) is committing EUR 21 million to better protect poor and vulnerable countries against the adverse effects of climate change and support growing local capability in risk and resilience analytics. The contribution is a key element of the German government’s InsuResilience Vision 2025 strategy, which aims to catalyse financial protection for 500 million people by 2025.
Svenja Schulze, Minister for Economic Cooperation and Development, said: “Climate Change Adaptation is a top priority for Germany. The upcoming IPCC Report sheds light on the urgent need to act. Under our G7 presidency we will continue to significantly enhance the efforts of all nations to build resilience in the face of the climate emergency. Building on the success of the InsuResilience Global Partnership, we are delighted to increase our financial commitment for climate change adaptation and initiate the Global Risk Modelling Alliance programme.”
AHM Mustafa Kamal, Minister of Finance, Bangladesh, V20 Chair, said: “The IPCC report is a stark reminder that we have to take action to safeguard economies and communities from the climate crisis. Insurance and other forms of financial protection are a vital safeguard measure. But insurance coverage is the least where climate impacts the most. We therefore strongly welcome the Global Risk Modelling Alliance (GRMA) because investing in better and more accessible data and analysis will help to close the protection gap. The most vulnerable desperately need international support to make financial protection against climate risks more affordable and accessible. We appreciate the German Government’s generosity of committing 21 million euros to better protect poor and vulnerable countries and hope for continuous international support for minimising climate vulnerability.”
Denis Duverne, Chairman of the IDF Steering Committee, said: “Too often, climate-vulnerable countries with the least resources are having to make hard decisions in adaptation and resilience based on a narrow, remotely generated view of their risk. By combining open technology, cross-sector risk expertise and funding for models and data, and most of all a joint, practical approach with countries, the GRMA can accelerate access to risk understanding where it is needed the most.”
The partnership will create the Global Risk Modelling Alliance (GRMA), a joint public-private technical assistance programme with three main components:
- A public-good fund to help countries fill critical risk model and data gaps
- A technical assistance team comprising risk practitioners combining both public and private sector experience
- Open-source risk modelling technology, tools and standards developed by the insurance industry and optimised for public sector use
The GRMA will support participating countries in building, sharing and further developing locally-driven views of climate and disaster risk, across ministries of finance, asset-owning ministries, disaster risk management authorities and research institutions. Through local ownership of the analysis, sovereigns and cities will be better able to develop and report strategic risk profiles, initiate climate-resilient investments, and transfer residual risk to international markets.
In support of the GRMA’s public-good aims, member companies of the IDF have already committed funds and technology to the programme and includes investment in the Open Data Standards (ODS) risk data standard, which is designed to promote model choice and interoperability.
Notes to Editors
With partners from G20 countries and the V20 Group, Germany launched the InsuResilience Global Partnership in 2017. InsuResilience aims at scaling-up climate and disaster risk finance and insurance solutions. The partnership is now active with more than 20 programs in over 100 countries. In 2021, InsuResilience programs already were able to protect 150 million poor and vulnerable people against climate risks. Following COP26 and in light of the increasing demand for effective climate change adaptation BMZ is providing additional funding of EUR 21 million to this end. This financial commitment will support the work of the InsuResilience Solutions Fund in the areas of premium support and the Global Risk Modelling Alliance of the Insurance Development Forum (IDF). The contribution is a key element of the German government’s InsuResilience Vision 2025 strategy, which aims to catalyse financial protection for 500 million people by 2025.
About the V20
Formed in 2015, the V20 Group of Finance Ministers is a dedicated cooperation initiative of economies systematically vulnerable to climate change. It is currently chaired by the People’s Republic of Bangladesh. The V20 membership stands at 48 economies including Afghanistan, Bangladesh, Barbados, Bhutan, Burkina Faso, Cambodia, Colombia, Comoros, Costa Rica, Democratic Republic of the Congo, Dominican Republic, Ethiopia, Fiji, The Gambia, Ghana, Grenada, Guatemala, Haiti, Honduras, Kenya, Kiribati, Lebanon, Madagascar, Malawi, Maldives, Marshall Islands, Mongolia, Morocco, Nepal, Niger, Palau, Palestine, Papua New Guinea, Philippines, Rwanda, Saint Lucia, Samoa, Senegal, South Sudan, Sri Lanka, Sudan, Tanzania, Timor-Leste, Tunisia, Tuvalu, Vanuatu, Viet Nam and Yemen.
For more information, please visit: www.v-20.org
+62 813 1421 3432
About the IDF
The Insurance Development Forum (IDF) is a public-private partnership led by the insurance industry and supported by international organisations, including the United Nations and the World Bank.
It was established to facilitate and support the growth and development of insurance-related resources and capabilities to help achieve the objectives of the Sustainable Development Goals (SDGs) and related United Nations (UN) Agreements, collectively herein known as the UN Global 2030 Agenda.
The IDF aims to optimise and extend the use of insurance and its related risk management capabilities to build greater resilience and protection for people, communities, businesses, and public institutions that are vulnerable to disasters and their associated economic shocks.
For more information please visit: www.insdevforum.org
+44 (0)7842 729 579
+44 (0)7547 901 618
About the ISF
The InsuResilience Solutions Fund (ISF) was set up by KfW German Development Bank, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and is managed by the Frankfurt School of Finance and Management. As implementing programme of the InsuResilience Global Partnership the ISF seeks to increase the resilience and capacity of developing and emerging countries to adapt to climate change by supporting comprehensive climate risk analysis, offering studies and advice for the development of new concepts for climate risk insurance solutions and co-funding the development and market introduction of climate risk insurance products,
For more details about ISF´s offer, please refer to www.insuresilience-solutions-fund.org.
+49 (0) 69 1540 080