Page - 483 - in Loss and Damage from Climate Change - Concepts, Methods and Policy Options

Chapter21 InsuranceasaResponse toLoss andDamage? JoAnneLinnerooth-Bayer,SwenjaSurminski,LaurensM.Bouwer, IlanNoy andReinhardMechler Abstract This chapter asks whether insurance instruments, especially micro- insurance and regional insurance pools, can serve as a risk-reducing and equi- tablecompensatory response toclimate-attributed lossesanddamages fromclimate extremes occurring in developing countries, and consequently if insurance instru- ments can serve the preventative and curative targets of theWarsaw International MechanismforLossandDamage(WIM).Thediscussionemphasisesthesubstantial benefits of bothmicro-insuranceprogramsand regional insurancepools, andat the sametimedetails their significantcosts.Beyondcostsandbenefits, amainmessage is that if no significant intervention is undertaken in their design and implementa- tion,market-basedinsurancemechanismswill likelyfallshortoffullymeetingWIM aspirationsof loss reductionandequitable compensation. Interventionscan include subsidies andother typesof support thatmake insuranceaffordable topoor clients; interventions can also enable public-private arrangements that genuinely catalyse risk reductionandadaptation.Manysuch interventionsarealready inplace, and the chapter highlights two potential success stories for insurance instruments serving themostvulnerable: theAfricanR4micro-insuranceprogramand theAfricanRisk Capacity (ARC) regional insurance pool.While support to these and other insur- ance programs continues to be framed as humanitarian aid based on the principle of solidarity, discussions on the G7 initiative to insure vulnerable households, as J.Linnerooth-Bayer (B) ·R.Mechler International Institute forAppliedSystemsAnalysis (IIASA),Laxenburg,Austria e-mail: bayer@iiasa.ac.at S.Surminski GranthamResearch InstituteonClimateChangeand theEnvironment,LondonSchoolof EconomicsandPoliticalScience (LSE),London,UK L.M.Bouwer Deltares,Delft,Netherlands e-mail: laurens.bouwer@hzg.de I.Noy VictoriaUniversityofWellington,Wellington,NewZealand L.M.Bouwer ClimateServiceCenterGermany(GERICS),Hamburg,Germany ©TheAuthor(s)2019 R.Mechler et al. (eds.),LossandDamage fromClimateChange,ClimateRisk Management,PolicyandGovernance,https://doi.org/10.1007/978-3-319-72026-5_21 483