Five case studies showcasing climate risk microinsurance programs
About the case studies
The problem: The climate crisis and insurance
Climate change disproportionately affects low-income and vulnerable populations around the world, which could lead to an additional 100 million people living in extreme poverty by 2030. For many low-income populations, climate risks impact agricultural livelihoods, as well as businesses, health, and even people’s lives. Organizations from all sectors are putting forward their solutions to tackle the global climate crisis, and we can learn a lot from each other.
With limited resources, in terms of available data and clear examples, it can be difficult to move into climate risk microinsurance. Insurers and intermediaries often face doubt and uncertainty, which influences decisions not to support low-income populations in mitigating their risks from climate change.
Knowledge as a first step to developing climate risk insurance solutions
The MicroInsurance Centre at Milliman collaborated with five different programs to develop case studies about their journeys to building a viable climate risk insurance solution. We intended to help risk carriers and other relevant stakeholders learn more about real-world solutions. In each of these case studies, we take an in-depth look at the strategic need and country climate context, the objectives of their climate initiatives, delivery model, program performance, and key learnings.
Individual case study reports
Case study 1: Making climate risk microinsurance work: Case study – Kenya Agriculture Insurance Programme (KAIP) with APA, Kenya
Case study 2: Making climate risk microinsurance work: Case study–Philippine Crop Insurance Corporation (PCIC), Philippines
Case study 3: Making climate risk microinsurance work: Case study–Green Delta Insurance Company (GDIC), Bangladesh
Case study 4: Making climate risk microinsurance work: MiCRO & Aseguradora Rural (AR), Guatemala (Download Spanish translation)
Case study 5: Making climate risk microinsurance work: Sanasa General Insurance Company Ltd (SGIC), Sri Lanka
Making climate risk microinsurance work: An analysis of five cases of climate risk microinsurance
Key terms and concepts
Climate risk insurance is a risk transfer solution that aims to protect individuals, businesses and countries against the negative impacts of extreme weather events that are becoming more frequent and more severe due to climate change.1
- Extreme weather events may include drought, flood, high winds, frost, hail, rising sea levels, etc.
- Microinsurance products that cover climate risk could be crop covers (area yield, weather index, hybrid products etc.), livestock covers, property damage covers (due to weather events like typhoons, floods etc.), business interruption covers (interruption due to weather events) etc.
Microinsurance: Risk-pooling products that are designed to be appropriate for the low-income market in relation to cost, terms, coverage, and delivery mechanisms.
1The ”climate risk insurance” definition used in this study was adapted from the InsuResilience Global Partnership’s policy brief Linking climate risk insurance with shock-responsive social protection.