Enhancing Financial Protection Against Catastrophe Risks: The Role of Catastrophe Risk Insurance Programmes


The financial management of catastrophe risks presents an important public policy challenge for governments across the world. Climate change, the increasing reliance on digital technologies and socioeconomic trends such as globalisation and urbanisation are affecting the frequency and severity of the floods, cyclones, cyber-attacks and infectious disease outbreaks that produce significant financial, economic and social costs each year.

This report examines the role of catastrophe risk insurance programmes (i.e. loss-sharing arrangements within the insurance sector and often in partnership with governments) in broadening the availability of affordable insurance coverage for catastrophe risks and limiting risks to public finances.

AXA Future Risks Report 2021

Climate change and cyber risk top the list of concerns

The report finds that the main risks in the next five to ten years will relate to climate change, cyber security risks and pandemics and infectious diseases.

Sunk Costs: The Socioeconomic Impacts of Flooding

Marsh McLennan

'Sunk Costs: The Socioeconomic Impacts of Flooding' is the first publication in Rethinking Flood, a four-part series examining the implications of flood risk for corporates, governments, and society. The report offers an overview of the current state and trends of flood risk globally. It discusses the economic costs of flooding, its multi-sectoral impacts, as well as its societal and environmental consequences. The report highlights the potential for flood risk to exacerbate pre-existing socioeconomic inequalities and discusses the role insurance can play to protect vulnerable communities. It additionally analyzes government strategies to narrow the protection gap and enhance national flood resilience, presenting their fiscal costs and potential drawbacks.

WMO Report on the State of the Global Climate 2020

World Meteorological Organization

2020 was an unprecedented year for people and planet: a global pandemic on a scale not seen for more than a century; global temperatures higher than in a millennium; and the highest concentration of carbon dioxide in our atmosphere for over 3 million years.

Issue Brief: Insurance For Climate Resilience

Climate Finance Advisors

Insurance is a financial instrument that allows vulnerable households, businesses, and communities to gain financial protection from unforeseen adverse events, including climate-related natural disasters and shocks such as storms, floods, fires, and droughts.

sigma 1/2021: Natural catastrophes in 2020: secondary perils in the spotlight, but don’t forget primary-peril risks

Swiss Re Institute

Global economic losses from natural catastrophe events in 2020 were USD 190 billion. In GDP-normalised terms, losses rose 1.6% between 1970-2020 on a 10-year moving average basis. This is indicative of the larger scale of losses that could result if an event of the past were to occur today, given the accumulation of socio-economic value and other dynamics such as changing weather conditions in the intervening years.

Weather, Climate & Catastrophe Insight, 2020 Annual Report


2020 proved to be one of the most challenging years in modern history. Following an above-average number of natural catastrophes with significant humanitarian and financial impacts, coupled with the most prolific global pandemic since 1918, the world heads into 2021 with numerous questions to be answered.

2020 Natural disaster balance

Munich RE

Record hurricane season and major wildfires – The natural disaster figures for 2020

Summary of Natural Catastrophe Events 2020

Willis Re eVENT™ Update

This report summarizes economic and insured losses from the most relevant natural catastrophe events that occurred during 2020.

The Global Risks Report 2021 - 16th Edition

World Economic Forum

Among the highest likelihood risks of the next ten years are extreme weather, climate action failure and human-led environmental damage; as well as digital power concentration, digital inequality and cybersecurity failure. Among the highest impact risks of the next decade, infectious diseases are in the top spot, followed by climate action failure and other environmental risks; as well as weapons of mass destruction, livelihood crises, debt crises and IT infrastructure breakdown.

Allianz Risk Barometer - Identifying the major business risks for 2021

The most important corporate perils for the next 12 months and beyond, based on the insight of 2,769 risk management experts from 92 countries and territories.

Global Climate Risk Index 2021 - Who suffers Most from Extreme Weather Events? Weather-related Loss Events in 2019 and 2000-2019


The Global Climate Risk Index 2021 analyses to what extent countries and regions have been affected by impacts of weather-related loss events (storms, floods, heat waves etc.). Human impacts (fatalities) and direct economic losses were analysed. The most recent data available — for 2019 and from 2000 to 2019 — were taken into account.

GFDRR Annual Report 2020 - Bringing Resilience to Scale

Global Facility for Disaster Reduction and Recovery

This Annual Report highlights the progress and results achieved during FY20. It provides an overview of grant making activities in six regions and across GFDRR’s eight targeted areas of engagement. It also explores some areas of the work in greater depth and includes financial statements for the fiscal year.

In a year unlike any other, the COVID-19 pandemic affected everyone. But for millions of people, the global health crisis also compounded the ongoing threat of natural hazards and disasters.

Insuring the climate transition: Enhancing the insurance industry's assessment of climate change futures


22 leading insurers and reinsurers from across the globe worked with UNEP FI to develop the first comprehensive guidance for the insurance industry to identify and disclose the impact of climate change on their businesses. This report represents the largest collaborative effort by market participants to pilot some of the most challenging recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Cities at risk – Building a resilient future for the world’s urban centres

This new Lloyd’s report, commissioned before COVID-19 and published in collaboration with Urban Foresight and Newcastle University, provides a comprehensive analysis of the risks’ cities are facing and will face in the future. It looks at their impacts and how urban areas can protect themselves from these threats.

It also suggests ways in which insurers and the relevant authorities could work together to build resilience, reduce risks and develop new insurance products and services that meet cities’ risk needs. This study helps city administrators and risk managers, as well as Lloyd’s market insurers and brokers, understand the risks that will influence the design and function of cities in the coming decade, and how insurance product development could respond to these changes.

Reimagining Resilience in a Post Pandemic World

9 September 2020

Munich Re US White Paper Wants to Know: Can We Use Lessons Learned from COVID-19 Pandemic to Mitigate the Risks of Climate Change?

COVID-19 Risks Outlook - A Preliminary Mapping and Its Implications

This report, written by the World Economic Forum in partnership with Marsh & McLennan and Zurich Insurance Group, taps into the views of nearly 350 senior risk professionals who participated in the COVID-19 Risks Perception Survey. They were asked to take a view on 31 risks across three dimensions: most likely for the world, most concerning for the world and most worrisome for companies.

OECD Policy Responses to Coronavirus (COVID-19) - Responding to the COVID-19 and pandemic protection gap in insurance

The COVID-19 pandemic and the measures taken to limit the spread of the disease have significantly disrupted economic activity in countries around the world, resulting in significant business interruption losses. The vast majority of these losses are likely to be absorbed by policyholders as, unless governments (or courts) intervene, few companies have business interruption coverage that is likely to respond to these types of losses – exposing the existence of an important protection gap for some pandemic-related business interruption losses. This note provides an overview of how business interruption insurance against pandemic risk could be provided with support from governments, and some of the challenges and considerations necessary for establishing such a programme.

Insurance for Climate Adaptation - Opportunities and Limitations

In this background paper submitted to the Global Commission on Adaptation, Cass Business School’s Professor Paula Jarzabkowski, Birkbeck, University of London’s Dr Konstantinos Chalkias and their co-authors make seven recommendations to maximise the benefits of insurance for climate adaptation.

Special report no 25/2018: Floods Directive: progress in assessing risks, while planning and implementation need to improve

Floods can cause injury and loss of life, considerable economic costs, and damage to the environment and cultural heritage. Serious floods have become more frequent in Europe. In recent years, more than twice as many flash floods of medium to large magnitude have been registered as in the late eighties. Climate change is an aggravating factor, triggering changes in precipitation and weather patterns, sea level rises and, consequently, more frequent and severe floods.

12th meeting of the World Forum of Catastrophe Programmes in Madrid

From 25 to 28 September 2018, the Consorcio de Compensación de Seguros (CCS) staged the 12th meeting of the World Forum of Catastrophe Programmes (WFCP) in Madrid.

Between State and Market: Protection Gap Entities and Catastrophic Risk

The challenges posed by the growing catastrophe insurance protection gap, particularly those of rebuilding in the aftermath of disaster, have prompted the generation of entities, which we label Protection Gap Entities (PGEs). These PGEs bring together market and non-market stakeholders in an effort to address the protection gap. They differ considerably in governance, political economies, points of origin, perils, and means of funding loss. Yet PGEs have the same broad goal:

To transform uninsured risk into insurance-based products that can be transferred into global financial markets to provide capital for recovery following a disaster.

Guide To Government Pools

Reinsurance pools seek to provide insurance where there is none or where it is not readily available, but the demand for them is not as great as it should be. To introduce this special report, Jonathan Gale, chief executive, Bermuda Reinsurance and managing director at AXA XL, writes that the industry needs to develop a broader approach to how the risk is assumed and accounted.

Climate insurance and water-related disaster risk management - Unlikely partners in promoting development?

There is a growing consensus that insurance, risk transfer, and sharing mechanisms have an important and growing role to play, particularly in offsetting the economic impacts associated with extreme events. What is less clear is the extent to which such instruments encourage adaptation programmes and policies that would serve to minimise future loss and damage and, hence, contribute to sustainable development. This paper does not pretend to offer answers, but rather contributes to the emerging discussion and brings to that discussion a water lens.

Insurance of weather and climate-related disaster risk: Inventory and analysis of mechanisms to support damage prevention in EU

Ramboll and the Institute for Environmental Studies (IVM) were contracted by the European Commission (EC) to conduct a study on the insurance of weather and climate-related disaster risk, and to create an inventory and analysis of mechanisms to support damage prevention in the European Union (EU). The study provides an overview of the use of insurance against natural disasters. It suggests general recommendations as well as specific recommendations on the role of the European Commission in addressing the issues uncovered, and encourages stakeholder’s efforts and best practices observed across the EU.