Cover image: President Cyril Ramaphosa visited flood-stricken parts of KwaZulu-Natal to offer support to affected communities and assess the response of government and civil society to this critical situation. (Photos: GCIS). Image credit: President Cyril Ramaphosa visits flood-stricken parts of KwaZulu-Natal, GovernmentZA, licenced under CC BY-NC-ND 2.0.
This paper looks at the role of insurance in addressing loss and damage with a focus on the recently launched Global Shield, an initiative by the G7 and more recently, the V20. In doing so, we draw on two case studies to illustrate the cost of loss and damage and the role played by insurance and highlight resource capabilities between developed and developing countries to cover the funding gap between insurance payouts and the cost of recovery.
The paper concludes that the role of insurance in addressing loss and damage is limited, it must be combined with other instruments and follow pro-poor principles and it must not distract from the urgent provision of finance to address loss and damage to meet the needs of households, communities and countries on the frontlines of climate change in the global South.