Reassurance

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Some might call the talks on Climate Change a little schizophrenic - one arm is trying to mitigate climate change, while the other is busy thinking of ways to adapt to climate change's impact. Now add a third layer: insurance, a precaution in case adaptation to climate change proves impossible.

UNEPFI, in partnership with the World Food Program and a reinsurance company, yesterday gave the conference a foretaste of its report on "Adaptation and Vulnerability to Climate Change: The Role of the Finance Sector." The report advocates for the establishment of public-private partnerships to enable countries like Ethiopia – the first test case – to insure itself against drought induced by climate change.

One panelist commented that this could be a way to maintain the viability of the insurance sector - by providing it with a good business opportunity. In fact, reinsurance was one of the first business sectors to take climate change seriously and balk at its predicted cost. For sure, it is reassuring to find out that the insurance sector might actually find a business case for climate change.

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Michael Saunby
November 15, 2006

It's always interesting to see how others interpret new ventures, so as someone who has been following this project for about 18 months this short article has my head buzzing with new thoughts.

In reality schemes like this can't deal with a failure to adapt. We all either adapt or die, but it allows for a few failures.

After all, if I mess up at work - which happens more often than I'd like - I'm generally given the chance to try again, and that's true for most of us. For subsistence farmers failure can be the end of everything - literally. So if we can apply some of what we have, financial reserves and multi-million dollar computers and weather satellites to make their lives a little safer then surely we must. And maybe, just maybe, with some transfer of knowledge from and to the farmers, together we can figure out what crops to grow, and when to grow them, even as the climate changes.

Climate change is scary, but humans are clever. We can beat this problem, I'm sure of it.

Jan Mumenthaler
November 21, 2006

Wanted to alert you that while Climate Change issues were being discussed in Nairobi, specific steps to ensure future availability of insurance covers for natural catastrophes in Africa were being discussed in Casablanca, Morocco.

The event which was jointly hosted by the African Centre for Catastrophe Risks, the African Insurance Organization, Societe Centrale de Reassurance and the World Bank proved to be a tremendous success evidenced by a record turnout and engaging presentations.

The conference program as well as links to the various presentations can be found on http://web.worldbank.org/WBSITE/EXTERNAL/WBI/WBIPROGRAMS/FSLP/0,,conten….

Under the section AGENDA, you will also find my presentation on Climate Change and Insurance.