Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) has provided the World Bank’s Global Index Insurance Facility (GIIF) with €10 million to improve the utilisation of insurance solutions by vulnerable, poorer smallholder farmers.
The signed agreement is part of the InsuResilience initiative on climate risk insurance, which aims to provide an additional 400 million people with access to insurance protection by the year 2020.
Dr. Gerd Muller, German Federal Minister for Economic Cooperation and Development, commented; “This is of utmost importance for sustainable development since natural disasters show to what extent climate change can hinder success in development. Climate insurance provides help – in a quick and cost-effective manner.”
The contribution will go towards the improvement and scaling up of extreme weather insurance solutions as risk management tools, and will provide financial knowledge as well as technical assistance of the GIIF. The funding will help the GIIF increase capacity and expertise among practitioners in developing regions that are vulnerable to extreme weather events and the impacts of climate change.
Ceyla Pazarbasioglu, Senior Director, Finance & Markets Global Practice, World Bank Group, said; “Understanding and managing risks caused by weather-related disasters is critical to help smallholder farmers build resilience, reduce food insecurity, and offset economic losses. Developing good insurance products is most important for agricultural regions that are vulnerable to disasters and climate impacts, such as Sub-Saharan Africa, Asia, and Latin America and the Caribbean.”
So far, GIIF has helped nearly a dozen partners in developing parts of the world set up index insurance markets, which in turn enables development of solutions for those in need, and that may have been unaware that this type of coverage was available to them.
GIIF has facilitated over 1.8 million contracts in developing countries, covering around 7 million people, with $178 million in sums insured.
