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Extreme weather events were almost twice as common over the past ten years as they were during the 1980s. The people on the frontlines of the climate crisis are those who are least responsible for causing it: the world’s poorest and most vulnerable communities. There is an urgent need to better support them in building their resilience to climate impacts. Insurance can play a valuable role in this, yet there is a vast gap in coverage across the developing world. Only around 100 million poor and vulnerable people in Africa, Asia and Latin America are covered, directly or indirectly, by insurance that protects them against climate risks.

Climate risk insurance has three benefits for poverty and vulnerability:

Protective: Insurance acts as a safety net so that when disaster strikes, fast insurance payouts prevent a family from falling into, or deeper into, poverty.
Promotive: The security afforded by insurance enables people to boost their productivity, building pathways to prosperity.
Transformative: Insurance can incentivise and support preparedness and risk reduction for individuals and the whole of society.

In order to realise these benefits, however, it is crucial to recognise that insurance is not a silver bullet and cannot work effectively as a standalone solution. Rather, it must be imple