Outlook
Outlook for the Partnership 2021
Strong foundation laid in 2020 despite ongoing pandemic
2020 has been a disruptive year for global resilience efforts. The ongoing pandemic not only revealed gaps in preparedness across local and global systems, it also diminished fiscal spaces to close these gaps and stay on track towards long-term climate and resilience targets. With a persistent climate crisis, and a compounding of health and natural hazard risk, the need for resilience is greater than ever, but capacities to take action seem diminished.
In spite of this, the Partnership was able to generate decisive momentum in 2020, even in the context of a Covid-19 world.
On the ground, as disasters hit several regions badly in 2020, the Partnership’s regional risk pools in the form of the Caribbean Catastrophe Risk Facility (CCRIF) and the African Risk Capacity (ARC) immediately supported policyholder governments with fast liquidity in a total amount of almost USD 70 million, enabling governments to assist in early action and disaster response.
In addition to this, Germany has provided EUR 19.5 million for ARC to support countries with premium payments in the Covid-19 crisis at a time when national budgets were already stretched.
On a strategic level, the High-Level Consultative Group (HLCG) of the Partnership emphasized the need for a multi-dimensional view on risk in Climate and Disaster Risk Finance and Insurance (CDRFI) practice, endorsed concrete Action Areas empowering the Partnership to enhance in-country adaptation and resilience planning, and underlined the Partnership’s commitment to leave no one behind through the InsuResilience Declaration on Gender. In addition, a new framework for monitoring and evaluation of Vision 2025 will enable the Partnership and key stakeholders to track progress towards a broad range of resilience impacts. This will provide a strong foundation for the Partnership’s work in 2021.
Walking the talk – putting in-country action in focus on route to COP26
The Climate Adaptation Summit (CAS) in late January 2021 builds on the work of the Global Commission on Adaptation (GCA) and launches a comprehensive Adaptation Action Agenda. As an action partner of the GCA, the Partnership will help shape this commitment through its Vision 2025 work plan: the main target by 2025 is to annually provide financial protection to 500 million poor and vulnerable people through CDRFI solutions. While the number of people benefitting from solutions under the Partnership has grown significantly over the last years, the protection gap remains large across vulnerable countries.
Strong collaboration at the country level will be crucial in addressing the immense challenges that lie ahead. CDRFI should not be a siloed process. Over the coming months many countries will consider updating their National Determined Contribution (NDC) through their national revision process and other climate action priorities. In this context, the integration of risk finance instruments into countries’ wider climate policy can generate substantial co-benefits for adaptation planning and promote cost-effective investments in resilience.
The Partnership will work with the NDC Partnership to channel risk financing capabilities and solutions into in-country climate action. In addition, a diagnostic tool will be developed with NAP Global Network on specific entry points of risk financing within National Adaptation Plans. These efforts will be complemented by south-south learning and a continued focus on knowledge creation and transfer.
The Partnership will launch its enhanced Knowledge Hub in early 2021 as an online repository of CDRFI know-how, evidence, best practices and links to relevant actors, with a user-friendly interface for more effective and faster learning. As mandated by Vision 2025, the newly formed InsuResilience Centre of Excellence on Gender-smart Solutions will also offer an online-based repository of information and a knowledge-sharing platform. This state-of the art Centre of Excellence is the first of its kind to serve the global CDRFI community. It will aggregate resources, support leadership, share best practices, research and training to promote and facilitate implementation of gender-smart approaches across the Partnership´s work and the broader CDRFI landscape.
Increased convergence and new knowledge formats should not be an end in themselves, rather they need to be targeted towards helping vulnerable countries address urgent resilience challenges. The Partnership will continue to work closely with the platform of the Vulnerable Twenty Group (V20) of Ministers of Finance in the Climate Vulnerable Forum to keep the vulnerable country perspective at the heart of its activities. This will entail an ongoing exchange of views between the V20 and the Program Alliance. With a focus on Micro, Small and Medium Enterprises, the V20-led Sustainable Insurance Facility will be a central mechanism to support an action-packed agenda 2021 for the InsuResilience Global Partnership Members.
Moreover, building on the HLCG’s mandate and lessons from Covid-19, the InsuResilience Secretariat will pool efforts with members for CDRFI to better address complex and compounding risks.
The importance of prearranged financing, early risk detection and appropriate plans for early action is greater than ever. Further to enhancing global risk financing systems, the private sector with its vast expertise and capital can play a critical role in a changing risk environment. The Partnership will continue to systematically engage with the private sector through the Insurance Development Forum (IDF), including through work under the Tripartite Agreement.
All of these efforts combined together have paved the way for a year of action towards the COP26 United Nations Climate Change Conference. On our way to COP26 in Glasgow, we envision a thriving collaboration between our members. In particular, further enhanced engagement with vulnerable nations will help to leverage in-country capacity, support the integration and consideration of CDRFI in national adaptation planning, and distil local know-how and strategies to be shared across the globe.