Seite - 335 - in Loss and Damage from Climate Change - Concepts, Methods and Policy Options

13 ExploringandManagingAdaptationFrontiers… 335 puts,outcomesand impacts toensure that the insuranceschemesactually reachand benefitpoorandvulnerablepeople is crucial. Sustainability Safeguarding financial, social and ecological sustainability is crucial for the long- termsuccessof insuranceschemes.This includesprovidinga long-termperspective on project planning and financing as setting up insurance schemes is amulti-year effort. Reliable flows ofmoney accompanied by a long-term perspective helps to create a safe environment for key actors to engage in. It also involvesmaking sure that insurance schemes do not incentivise practices that are not environmentally sustainable and incentivising risk reduction and prevention through the design of the insurance scheme, including risk-based premiums. From a social perspective, ensuring the participation and inclusionofwomen in climate risk insurance policy andprogramming iskey (Schäfer andWaters2016). EnablingEnvironment Anenabling environment is a set of interrelated legal, organisational, fiscal, infor- mational,political andcultural conditions that facilitate thesuccessfuldevelopment and implementation of an insurance scheme.Although the criteria for an enabling environmentwillbeinevitablycontextual,itisvitaltoactivelybuildanenablingenvi- ronment thataccommodatesandfosterspro-poor insurancesolutions.Keyfactorsof anenablingenvironment includecapacity-buildingofkeystakeholders, appropriate regulatory framework, strong, long-term partnerships and availability of data and technology(SchäferandWaters2016).First,capacitybuilding isneededtoimprove thefinancialand insurance literacyandriskawarenessof the insured, local insurers, distributionchannelsandgovernments.Inthecontextofpro-poorinsurancesolutions it is important to use capacity building tools that respond to the needs of the target groupandaresuitabletoeducateclientswithlowwrittenliteracyaboutthecomplex- ityofindexinsurance.Second,successful insuranceschemesneedfunctioningregu- latoryandlegalframeworks thatgovernthemarket,supporttheeffectivefunctioning of theschemeandallowgrowthbyactivelyworkingwithnationalgovernmentsand regulatoryagencies.Third, strong, long-termpartnerships, inparticularpublic–pri- vatepartnerships,whichfosteraclearallocationof roles isan importantcomponent ofanenablingenvironment.TheIndex-BasedLivestockInsuranceProject(IBLIP)in Mongoliawasfirst introduced in2006andprovidesherderswith insurance through partneringwith local private insurance companies. Insuranceprotects herders from climate-relatedlossestotheir livestock.WithIBLIPthereisarisk-layeringapproach toholistic riskmanagement, combiningself-insurance,marketbased insuranceand a social safety net. Herders only bear the costs of small losses that do not affect the viability of their business; larger losses are transferred to the private insurance industryandthefinal layerofcatastrophic loss isbornebytheGovernmentofMon- golia. The combination of the public disaster response product (a social safety net forherdersofferedbythegovernment)andtheprivatebase insuranceproduct (com- mercialproductsoldbyprivatecompanies)provedtobehighlysuccessfulforIBLIP. Fourth, freelyaccessibledataand technologyaswell ashazard/weathermonitoring