How to Build Resilience in Emerging Markets with Climate Risk Insurance
As an insurance executive, you understand the importance of building resilience in emerging markets. Climate change is a growing threat, and vulnerable populations and small businesses need affordable insurance protection. That’s why BlueOrchard, a global impact investment manager and member of the Schroders Group, has launched the InsuResilience Investment Fund Private Equity (IIF PE II). In collaboration with the German development bank KfW, the fund aims to mobilize private sector capital to support climate change adaptation and build resilience in emerging markets.
According to a recent article by Funds Europe, the IIF PE II has already raised over $50 million and made significant investments in two companies within the climate insurance sector. Igloo, a Singapore-based insurtech firm, has introduced a weather insurance product for farmers in Vietnam. Meanwhile, Newe, a firm in agricultural insurance in Brazil, aims to extend agricultural insurance to over four million smallholder farmers in the country. BlueOrchard’s predecessor had already benefitted over 48 million beneficiaries in 45 countries through insurance coverage.
But how can you, as an insurance executive, build resilience in emerging markets with climate risk insurance? Here are five steps to get started:
Identify the most vulnerable populations and small businesses in emerging markets that are at risk of climate change impacts. This could include farmers, fishermen, and low-income households.
Develop affordable climate risk insurance products that meet the needs of these populations and businesses. This could include weather insurance for farmers, flood insurance for households, and crop insurance for small businesses.
Partner with local governments, NGOs, and other stakeholders to raise awareness of the importance of climate risk insurance and promote uptake among the target populations and businesses.
Leverage technology and data analytics to improve the accuracy of risk assessment and pricing of climate risk insurance products. This could include using satellite data to monitor weather patterns and predict crop yields.
Continuously monitor and evaluate the effectiveness of climate risk insurance products in building resilience and reducing vulnerability to climate change impacts. Use this feedback to improve and refine the products over time.
By following these steps, you can help build resilience in emerging markets and protect vulnerable populations and small businesses from the impacts of climate change. And with the help of companies like BlueOrchard and their InsuResilience Investment Fund Private Equity, you can mobilize private sector capital to support this important work.
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Read the original article by Funds Europe here.