Gender and Risk Finance: Examples of inclusive disaster risk financing in LAC and West Africa

Authored by: Leticia Gonçalves, Oda Henriksen, and Michael Goode

Categories: Humanitarian Emergencies
Sub-Categories: Climate and Environment, Disaster Risk Reduction and Resilience (DRRR)
Region: Latin America and the Caribbean
Year: 2023
Citation: Gonçalves, Leticia, Oda Henriksen, and Michael Goode. Gender and Risk Finance: Examples of inclusive disaster risk financing in LAC and West Africa. World Food Programme, 2023.

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Executive Summary

For over a decade, WFP has been supporting climate risk insurance as an important piece of the strategy for building women’s economic empowerment. The fast recovery and protection from loss and damages that access to climate risk insurance can provide helps countries and households to better manage the impacts of the climate crisis, which is why WFP is advancing financial protection as one avenue for building resilience to extreme weather events. Currently, WFP supports climate risk insurance programmes in 19 countries in Africa, Asia, and Latin America and the Caribbean at the micro, meso, and macrolevel.

Sovereign insurance or macro-level insurance, is one approach where WFP partners with national governments and regional risk pools to purchase an insurance product or top-up premium finance for an existing policy to finance WFP’s assistance when a climate shock triggers a payout. WFP’s meso and microinsurance programmes, under the R4 Rural Resilience Initiative (R4), target vulnerable farming or pastoralist households as well as micro, small and medium entrepreneurs (MSMEs) to support access to insurance through an integrated risk management approach. The initiative builds resilience through four integrated pillars: risk reduction, risk transfer, risk retention, and prudent risk taking. These pillars complement each other and provide support for different risk severity levels, as insurance is not a standalone solution for managing a variety of risks.