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Insurance only part of disaster resilience, says climate change panel

Date Published: 
03/07/2013
Summary: 

In most developing countries, farmers risk losing their crops and livestock to droughts or floods, and the recent intensity of these climatic shocks has been record-setting. As the losses from these events mount, the developing world has been turning to the experiences of richer nations in transferring risk through mechanisms such as insurance. But experts – including the authoritative Intergovernmental Panel on Climate Change (IPCC) in its special report on managing the risks of extreme events and disasters to advance climate change adaptation (pdf) (SRex) – have sounded a note of caution in portraying insurance as a panacea for climatic shocks. (..) Using CCRIF as a model, the UN World Food Programme has helped the African Union set up the Africa risk capacity (ARC), an insurance and early response facility whose objective is to pay out funds when a drought occurs.