At Understanding Risk 2024, a panel discussion focused on the collaboration between African Risk Capacity Ltd., CLIMBS Life and General Insurance Cooperative Official, Howden, and the Natural Disaster Fund (NDF), aimed at helping vulnerable communities build climate and NatCat resilience in countries eligible for official development assistance (ODA).

The NDF, managed by our Global Parametrics team, is a public-private partnership with capital committed by the UK government’s Foreign, Commonwealth and Development Office, and Germany’s development bank KfW on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).

Three key takeaways from the panel discussion:

• The NDF is enabling innovation in parametric climate insurance across the board - from micro/meso insurance for cooperatives in the Philippines to large-scale capacity provision for Resilience Risk Pools.

• Parametric insurance makes climate risks insurable and investable - not only for the insurance industry but also for government donors. The NDF's success underlines this and makes a strong case for further scale-up of the fund alongside the establishment of additional global risk-taking mechanisms.

• It is crucial to overcome old debates of adaptation funding vs. loss & damage vs. insurance. Integrated support amidst the climate crisis requires concerted action with all available tools. The L&D fund should consider premium support for vulnerable countries as one of the disbursement options. 

Our gratitude to The World Bank for inviting us to present the NDF, and to our panelists Lorraine Njue, FIA, Noel R., Rowan Douglas CBE, and Delia Kaiser for the Global Shield against Climate Risks.