Climate risk insurance

Climate risk insurance is a type of insurance designed to mitigate the financial and other risk associated with climate change, especially phenomena like extreme weather.[1][2] The insurance is often treated as a type of insurance needed for improving the climate resilience of poor and developing communities.[3][4] Critics of the insurance, say that such insurance places the bulk of the economic burden on communities responsible for the least amount of carbon emissions.[4]

Moreover, its theorized that high-premiums in high risk areas experiencing increased climate threats, would discourage settlement in those areas.[1]

The international community invested in developing further support for this kind of insurance through the InsuResilience Global Partnership launched at COP23.[4] That group, supports regional programs such as Climate Risk Adaptation and Insurance in the Caribbean (CRAIC) and international organizations like the Munich Climate Insurance Initiative.[4] The ACT Alliance published a guidebook for equitable and climate justice oriented model for climate risk insurance in 2020.[5]