Embedding Parametric Insurance in the DRF Toolkit at COP28

In light of the catastrophic impact of the climatic shocks on lives and livelihood, there has been marked focus on investing in parametric insurance as a key tool to build resilience. An inherent advantage of parametric insurance is the availability of quick liquidity in the aftermath of a disaster as there is no loss adjustment required compared to traditional insurance. The design is based on predefined triggers and the payout is eligible once the set threshold is met.

The Pacific Catastrophe Risk Insurance Company (PCRIC) will convene a high-level panel at COP28 to discuss embedding parametric insurance in the DRF Toolkit.

The panel discussion will address, amongst others:

1. DRF architecture and the importance of risk pooling
2. The way in which the Global Shield financing architecture would be able to assist the vulnerable nations as part of the loss and damage initiative.
3. Seeking perspectives of policy makers, Risk Pools and academics on the role parametric insurance could play and its untapped potential.
4. Identifying how parametric insurance with the availability of premium support could be further harnessed in building resilience.
5. Importance of a well-developed suite of parametric products to safeguard against the impact of disasters.

Regional Risk Pools have a fundamental role to play as a shock absorber of climatic risks and thus the need to ensure that their insurance products are attuned to the risk profile of their client countries. To this end, a more innovative approach is being explored to in-build anticipatory action in the parametric product to ensure a portion of funding is available for disaster preparedness.

Date: 4 December 2023
Time: 16h00
Venue: Blue Pacific Pavilion