“Global” insurance against weather hazards

"Global" insurance against weather hazards

Insurance against weather risk. The Global Shield, launched by Germany and the V20, is essentially a new structure that brings together some sixty vulnerable countries. With G7 funding, it was officially announced on Monday 14 November COP27, in Egypt. It has an amount of €200 million and can be used by vulnerable countries upstream or downstream of a climate disaster.

In practice, these countries should be allowed to quickly access funds for insurance and protection against disasters after floods or droughts. “It could be adaptive social protection systems.”or “Emergency financial assistance to a government to rebuild a bridge or school”German Development Minister Svenska Schulz explained at a press conference.

Overcome low funding

The establishment of this new system was agreed in principle by seven major Western countries, the G7, at a summit in June. Aim to overcome structure “Weaknesses in the Financial Protection Structure” In countries that are already heavily indebted.

The first beneficiaries will include Bangladesh, Costa Rica, Fiji, Ghana, Pakistan, the Philippines and Senegal, according to a press release issued by Germany. The €200 million shield is mainly funded by Germany and to a lesser extent by France, Ireland, Denmark and Canada. America must also contribute. However, these amounts remain a drop in the bucket. The V20 estimates that since 2000 the damage caused by climate impacts to its member economies has been $525 billion.

Insurance instrument

“This is a concrete commitment on the part of France, which is mobilizing new funding here in the form of donations – 20 million euros – to launch a device. (…) is realFanny Petitbon of the NGO CARE responded. On the other hand, it is regrettable that France has decided to contribute to one of the funds of the “Shield”, which is mainly focused on the private sector. »

Some NGOs are reserved by the way the system is designed. Not about that “compensation” Demand from developing countries in the face of responsibility, pure and simple, for loss and damage caused by climate change. “Historical” Developed countries on climate change, but in addition to public funds, a “shield” that partially mobilizes private insurance players.

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Damage not covered

This sight “Insurance” Loss and damage raises several concerns within civil society: it imposes a burden on insurance premiums in already indebted countries; Some slow climate risks (such as sea level rise) or some areas are not covered; Given the prevalence of climate disasters around the world, private insurers may be reluctant to insure certain future risks – or risk seeing premiums skyrocket.

armor “This COP is not a ploy to avoid formal negotiations on loss, damages or financial arrangements.”Svenja Schulz assured, pointing out that this is not the case “Not the only solution” Slow events or so-called losses must also be addressed to this issue. “Non-economic”. The device should be deployed in the coming months.

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