Uninsurability is a significant climate impact that has homeowners, businesses, governments and insurance companies searching for answers and solutions. UNU-EHS Senior Researcher and climate insurance expert Sinja Buri was interviewed for the BBC World News’ Business Daily programme on the need for innovative insurance products such as parametric insurance.
This type of insurance is designed to be faster and more efficient when dealing with damages due to disasters like hurricanes or cyclones. Instead of waiting for lengthy damage assessments after the fact, parametric insurance payouts to policy holders are made once parameters like windspeed or floodwaters rise to a predetermined threshold. This is helpful for people to rebuild as soon as possible and to minimize impacts to livelihoods.
“With traditional insurance it can take weeks if not months to receive a payout. But that is time we don’t have. There are immediate costs that need to be taken care of,” said Buri. For instance, in the wake of a storm a farmer or fishers must repair equipment, clean damages up, continue to pay their employees and even pay for food. She particularly noted that this can help all over the world, but communities in Small Island Developing States (SIDS), such as in the Pacific or in the Caribbean, which are disproportionately affected by climate risks can benefit from such insurance.
Buri leads the UNU-EHS project Pacific Insurance and Climate Adaptation Programme (PICAP), which aims to improve preparedness and resilience in the Pacific by developing and implementing products like parametric insurance for countries in the region.
To listen to the full programme, click here. To learn more about PICAP click here.
