The Head of ILO's Microfinance Innovation Facility states that larger insurance schemes are more likely to be effective in covering impoverished people against weather-related disasters and the impacts of climate change, as they can pool climate risk among broader population and territorial groupings, provide insurance at a cost low enough for the poor, and be viable without subsidies.
2 August 2012: The Microfinance Innovation Facility of the International Labour Organization (ILO) underscores that larger insurance schemes are more likely to be effective in covering impoverished people against weather-related disasters and the impacts of climate change.
In an ILO press release, Facility Head Craig Churchill highlights that insurance schemes to reduce the vulnerability of the poor to weather disasters and climate change may need to go beyond the “micro” format to work at “meso” and “macro” levels instead. He notes that scaling up is needed in order to pool climate risk among broader population and territorial groupings, provide insurance at a cost low enough for the poor, and be viable without subsidies.
He cites the Microinsurance Catastrophe Risk Organisation (MiCRO), created in March 2011 to help protect Haiti’s micro-entrepreneurs from the economic impact of natural catastrophes as an example of a meso-level scheme with the potential for such viability. He also notes the Caribbean Catastrophe Risk Insurance Facility (CCRIF) as an example of a macro-level risk-pooling facility.
The Microinsurance Innovation Facility, housed at the ILO’s Social Finance Programme, seeks to increase the availability of quality insurance for the developing world’s low-income families to help them guard against risk and overcome poverty. The Facility was launched in 2008 with the support of a grant from the Bill & Melinda Gates Foundation. [ILO Press Release] [Microinsurance Innovation Facility website]