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Reasons why WFP supports access to climate risk insurance - June 2022

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WFP integrates insurance into its operations to confront the growing frequency and intensity of climate-related disasters In 2021, extreme weather events and natural hazards cost the world US$343 billion in economic losses, the fourth highest year on record. Of these losses, only US$130 billion was compensated by insurance, meaning 60 percent of those losses were not recovered. If you consider that the covered losses are primarily in high income countries who are largely responsible for climate change and where infrastructure and population are better insured, you can start to get a picture of the level of injustice underlying the climate crisis. Lack of insurance when a climate-related disaster hits can force families into selling productive assets or push them into a food crisis. Access to insurance can be an efficient tool for financial protection from these risks.

To ensure that both WFP and the people it serves have financial resilience in the face of increasing climate-related disasters, WFP has tested and developed climate risk insurance solutions to both protect and improve people’s livelihoods as well as finance rapid recoveries.