Page - 333 - in Loss and Damage from Climate Change - Concepts, Methods and Policy Options

13 ExploringandManagingAdaptationFrontiers… 333 Box13.2SevenPro-PoorPrinciples forClimateRiskInsurance 1. Facilitatingcomprehensive-needsbasedsolutions:Solutions toprotect thepoor fromextremeweather eventsmust be tailored to local needs and conditions. It is imperative to embed insurance in comprehensive riskmanagement strategies that improve resilience. 2. OfferingClient value: Providing reliable coverage that is valuable to the insured is crucial for the take-upof insuranceproducts. 3. EnsuringAffordability:Measurestoincreaseaffordabilityforpoorandvulnerable people areparamount to the successof an insurance schemeandalso important to satisfyequityconcerns. 4. Maximising accessibility: Efficient and cost-effective delivery channels that are alignedwith the local context arekey for reachingscale. 5. Allowing forParticipation,Transparency&Accountability: Successful insur- anceschemesarebasedon the inclusive,meaningfulandaccountable involvement of(potential)beneficiariesandotherrelevant local-levelstakeholders in thedesign, implementation and review of insurance products, creating trust and providing a basis for localownershipandpoliticalbuy-in. 6. GeneratingSustainability:Safeguardingeconomic,socialandecologicalsustain- ability is crucial for the long-termsuccessof insuranceschemes. 7. Creatinganenablingenvironment: It is vital to activelybuild an enabling envi- ronment that accommodatesand fosterspro-poor insurancesolutions. Comprehensive,NeedsBasedSolutions Thepoor andvulnerable facemultiple risks that get in thewayof opportunities to reduce poverty. For many of the analysed insurance schemes, the key to success has beenoffering comprehensive solutions tomitigateweather risks. Three impor- tant factors were identified in the analysis of 18 existing insurance schemes: (1) implementingrisk,needs,demandandcontextassessments, (2) linking insurance to ex-anteclimateriskmanagement,and(3)fosteringlocallydrivenandownedschemes (Schäfer andWaters 2016).TheRuralResilience Initiative (R4) is a goodexample forthisprinciple.R4currentlyreachesmorethan37,000farmerswithfourintegrated riskmanagementstrategies:risktransfer,riskreduction,prudentrisktaking,andrisk reserves.While the risk transfer enables the poorest farmers to purchase aweather index insurance against drought, farmers can pay insurance premiums in cash or throughinsuranceforassets (IFA)schemesthatengagetheminriskreductionactiv- ities. IFAschemesarebuilt intogovernment safetynet programmesorWorldFood Programme food assistance for assets (FFA) initiatives.Additionally, individual or groupsavingenable farmers tobuildafinancialbase.Providingaself-insurance for communities, group savings can be loaned to individual members with particular needs (R42015). ClientValue Ensuringthatcoverageisreliableandthatcriticalrisksarenotunder-insurediscritical for the take up and success of insurance products that target the poor (Schäfer and Waters 2016). Bundling the insurance product, where appropriate, with additional