WASHINGTON, November 10, 2011 –The Special Climate Change Fund (SCCF) administered by the Global Environment Facility (GEF) is providing $5.5 million to fund the technical and regulatory work needed to develop catastrophe and weather-risk insurance markets and mitigate the negative impact of climate change in Albania, FYR Macedonia, and Serbia, through the project ‘Southeastern Europe and Caucasus Catastrophe Risk Insurance Facility (SEEC CRIF)”. The World Bank is the implementing partner of the project, and Europa Re, a catastrophe and weather risk insurance facility, is the executing agency.
The $5.5 million SCCF grant will fund numerous technical activities. The grant will support actuarial and probabilistic country weather and climate risk assessments that are necessary to develop insurance pricing and underwriting guidelines; funding the implementation of regulatory frameworks to ensure catastrophe and weather risk insurance products comply with national laws; and acquiring weather reporting in order to provide timely readings of temperature and precipitation – data needed for parametric weather risk contracts.
The SCCF grant will also go towards the development of risk maps, climate risk models, and the crafting of parametric weather risk insurance products, all of which will require the compilation of temperature and precipitation indices. Lastly, this new funding will support public education projects around disaster risk exposure, the benefits of catastrophe and weather risk insurance, and how to acquire it. The SCCF grant will assist in the development of weather risk insurance products, which will assist in enhancing adaptive capacity to climate change in the recipient countries.
“The SCCF grant will enable Europa Re to finance the essential technical work required for the development of weather risk insurance markets in Albania, Serbia, and FYR Macedonia,” said Eugene Gurenko, World Bank Lead Insurance and Risk Management Specialist and task team leader of the program. “The SCCF funding will greatly assist Europa Re in its aim to mitigate the financial impact of climate change and catastrophes. Europa Re will offer easily accessible weather risk insurance products to local businesses, households, and government agencies. These products will reduce the financial impact of extreme weather conditions on earnings, livelihoods, and fiscal revenues.”
Ms. Bonizella Biagini, manager of the Special Climate Change Fund (SCCF) commented, "The SCCF is characterized for achieving climate resilience through the most cost-effective and innovative approaches. In the case of the CRIF, by engaging the private sector and providing innovative insurance products, these countries will be able to cope with the severe impacts of climate change which are also becoming less predictable. The project will enable local businesses and populations to buy state-of-the-art catastrophe and weather risk insurance product, at affordable costs"
In supporting this important endeavor, the SCCF joins the World Bank, the United Nations International Strategy for Disaster Reduction (UNISDR), and the Swiss State Secretariat for Economic Affairs (SECO) in providing necessary funds to the Southeastern European countries to facilitate the insurance schemes developed by Europa Re. Already, in coordination with UNISDR, the World Bank has financed over $17 million in membership contributions and technical assistance funding to the Facility. SECO has provided $4.5 million in funding to help with the technical and regulatory work required to develop catastrophe and weather risk insurance products.
About Europa RE: Europa RE is a specialty catastrophe reinsurance company that aims to facilitate the growth of catastrophe and weather risk insurance markets in member countries. Incorporated under Swiss Law in November 2009, Europa Re is designed as a regional reinsurance pool that will benefit from economies of scale, regional risk diversification, and the state-of-the-art risk management capabilities that will consequently translate into lower premium rates for weather and catastrophe risk insurance products in Southeast Europe.
About the SCCF: The Special Climate Change Fund (SCCF) was established by the United Nations Framework Convention on Climate Change (UNFCCC) to provide grants to support adaptation actions in all developing countries under the Convention, in order to reduce their vulnerability to climate change.