title: Pro-poor climate risk insurance: the role of community-based organisations
Creators: name: Matias, Denise Margaret
name: Fernández, Raúl
name: Hutfils, Marie-Lena
name: Winges, Maik
Publisher: name: German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)
publisherIdentifier: https://ror.org/01t3zke88
publisherIdentifierScheme: ROR
Year: 2018
Subjects: subject: Süd-Asien
subject: Ost-Asien
subject: Armut
subject: Ungleichheit
subject: Klimawandel
subject: South Asia
subject: East Asia
subject: Poverty
subject: Inequality
subject: Climate change

description: In the face of increasingly frequent extreme weather events, the need to manage climate
 risk becomes more urgent, especially for the most vulnerable countries and communities.
 With the aim of reducing vulnerability, climate risk transfer in the form of climate risk
 insurance (CRI) has been gaining attention in climate policy discussions. When properly
 designed, CRI acts as a safety net against climate change impacts by providing financial
 support after an extreme weather event. Two main types of insurance enable payouts:
 indemnity (traditional) insurance or predefined parameters (index-based) insurance.
 Individuals, groups, or even governments may take out policies with either type of
 insurance and receive payouts directly (insurer to beneficiary payout) or indirectly
 (insurer to aggregator to beneficiary payout). Direct insurance is usually implemented at
 the micro-level with individual policyholders. Indirect insurance is usually implemented
 through group contracts at the meso-level through risk aggregators and at the macro-level
 through the state. <br> While promising, risk transfer in the form of CRI also has its
 share of challenges. Within the United Nations Framework Convention on Climate Change, the
 lack of accessibility and affordability of CRI for poor and vulnerable groups have been
 identified as barriers to uptake. In light of climate justice, asking the poor and
 climate-vulnerable groups - most of whom do not contribute substantially to anthropogenic
 climate change - to solely carry the financial burden of risk transfer is anything but
 just. Employing a human rights-based approach to CRI may ensure that the resilience of
 poor and climate-vulnerable groups is enhanced in a climate-just manner. <br> Indigenous
 peoples are some of the poorest and most climate vulnerable groups. Often marginalised,
 they rarely have access to social protection. The strong communal relationship of
 indigenous peoples facilitates their participation in community-based organisations
 (CBOs). CBOs are a suitable vehicle for meso-insurance, in which risk is aggregated and an
 insurance policy belongs to a group. In this way, CBOs can facilitate service provision
 that would otherwise be beyond the reach of individuals. <br> Conclusions of this
 briefing paper draw on a conceptual analysis of meso-insurance and the results of field
 research conducted in March 2018 with indigenous Palaw’ans in the Philippines. We find
 that CRI needs to be attuned to the differential vulnerabilities and capacities of its
 beneficiaries. This is particularly true for poor and vulnerable people, for whom issues
 of accessibility and affordability need to be managed, and human rights and pro-poor
 approaches need to be ensured. In this context, meso-insurance is a promising approach
 when it provides accessibility and affordability and promotes a pro-poor and human
 rights-based approach of risk transfer by: 
 

 
 Properly identifying and involving target beneficiaries and duty-bearers by employing
 pro-poor and human rights principles.
 

 Employing measures to improve the financial literacy of target beneficiaries.

 Designing insurance models from the bottom up.
description: Briefing Paper, 19/2018