This new insurance model could transform disaster response funding

The IFRC has introduced a world-first indemnity insurance policy to back its Disaster Response Emergency Fund (DREF), preventing funds from running out when multiple disasters occur in a single year. Triggered for the first time in September 2024, the policy has already provided over 10 million Swiss francs to support relief efforts in regions including Bolivia, Sri Lanka, and Honduras. The IFRC aims to expand the fund's annual capacity to over 100 million Swiss francs, with insurance providing up to a quarter of that capacity.

• The IFRC-DREF has historically provided quick, flexible, and unearmarked funding for small- and medium-scale disasters, but it was limited by a finite budget dependent on annual donors, creating a risk that funds would be exhausted by the end of the year.
• In 2023, the IFRC and insurance broker Aon implemented an indemnity insurance policy that triggers a payout when the DREF's annual spending exceeds a specific threshold, providing additional resources for disaster response.
• The insurance policy was triggered for the first time in September 2024 due to a high volume of disasters, including Cyclone Gaemi in the Philippines, a dengue outbreak in Cape Verde, droughts in Iran, and landslides in Rwanda.
• The policy has delivered over 10 million Swiss francs in payouts, supporting relief efforts for wildfires in Bolivia (late September), floods in Sri Lanka (October), and floods in Honduras (November).
• The IFRC intends to increase the annual capacity of the DREF to more than 100 million Swiss francs, with insurance expected to contribute up to 25% of that total capacity.

APA

Chapagain, J. (2024). This new insurance model could transform disaster response funding. World Economic Forum. https://www.weforum.org/stories/climate-action/insurance-disaster-response/

Chicago

Chapagain, Jagan. This new insurance model could transform disaster response funding. World Economic Forum, 2024. https://www.weforum.org/stories/climate-action/insurance-disaster-response/.

Wikipedia

{{cite press release |last1=Chapagain |first1=Jagan |title=This new insurance model could transform disaster response funding |publisher=World Economic Forum |date=17 December 2024 |url=https://www.weforum.org/stories/climate-action/insurance-disaster-response/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{chapagain2024this, author = {Chapagain, Jagan}, title = {{This new insurance model could transform disaster response funding}}, publisher = {World Economic Forum}, year = {2024}, month = dec, url = {https://www.weforum.org/stories/climate-action/insurance-disaster-response/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }