Reducing the humanitarian finance gap
The power of insurance
A summary of an article by Ivo Menzinger first publiahed on openminds.swissre.com.
Imagine donor countries emphasizing the "power of insurance", humanitarian actors asking for premium subsidies from donors to finance disaster risk insurance schemes and (former) multi-lateral executives suggesting development banks should extend concessional loans to countries to jump start the use of risk transfer programs.
Well -- all of this just happened in one and the same session at the World Humanitarian Summit. "Reducing the Humanitarian Finance Gap: The Power of Insurance, Forecast-Based Actions and Recovery Finance" was the unlikely title of this event organized by the German Federal Ministry for Economic Cooperation and Development and the World Food Programme.
Minister Gerd Mueller from Germany elevated insurance to a fundamental principle of humanitarian response in order to increase resilience. He suggested to integrate insurance systematically in World Food Programme operations: "no more pledging conferences" and "grappling for funds after the event".
Baroness Verma, Parliamentary Under Secretary of State for International Development from the UK, emphasized DFID's strong commitment to further the use of insurance mechanisms both in the context of the G7 InsuResilience programme and beyond.
Ertharin Cousin, Executive Director of the World Food Programme (WFP), noted that speakers are in "violent agreement" that insurance needs to play a stronger role in humanitarian finance and announced that WFP will use replica policies from the African Risk Capacity (ARC) to bolster emergency response to droughts.
Ngozi Okonjo-Iweala, ARC Agency Governing Board Chair, observed that the time for new approaches to humanitarian finance seems to have come. She suggested development banks such as African Development Bank or the World Bank extend concessional loans for countries so that they can participate in sovereign disaster risk insurance.
Till Wahnbaeck, CEO Welthungerhilfe, noted that a paradigm shift seems to be in the air. The Start Network has become a partner of ARC to bring insurance to NGOs. His recommendation to humanitarian actors was as simple as it was powerful: "don't leave the sharpest tools in the box to the capitalists".