In an effort to bolster innovative approach to disaster preparedness and financial resilience, the Global Shield Solutions Platform (GSSP) has launched the Global Shield Programme for Resilient Risk Pools (GSRRP). A range of support for Climate and Disaster Risk Finance and Insurance (CDRFI) interventions are offered to Regional Risk Pools to access individually or jointly.

Regional Risk Pools offer a unique value proposition combining rapid financial resources with comprehensive risk management benefits. These pools serve as localised mechanisms that enable member countries to pool resources, share risks, and collectively manage the financial impact of disasters. By aggregating risks across diverse nations, they mitigate the burden on individual countries when disasters strike, enhancing their capacity to respond effectively.

Hon. Tiofilusi Tiueti, Tonga’s Minister of Finance said:

“Regional Risk Pools emerge significant to address climate risks, to reduce expenses, to scale up disaster response, and invest in climate resilience. International cooperation becomes crucial in this context, let’s work together for great, strong, efficient and fair Regional Risk Pools.”

Over the past two decades, four prominent Regional Risk Pools have been established, each catering to distinct regions:

CCRIF SPC (formerly The Caribbean Catastrophe Risk Insurance Facility): Serving the Caribbean and Central America.
ARC - African Risk Capacity: Extending services to member states of the African Union.
PCRIC - Pacific Catastrophe Risk Insurance Company: Catering to Pacific Island countries.
SEADRIF - Southeast Asia Disaster Risk Insurance Facility: Offering services to all ASEAN+3 countries.

The GSRRP offers a single access route to pooled funding that Regional Risk Pools can access directly and according to their own needs.

Donors contributing to the Global Shield Solutions Platform (Denmark, EU Commission, France, Germany, Ireland, and Luxembourg) reiterated their sustained support for the regional risk pools as an essential element for closing the protection gap in vulnerable countries. Climate risk insurance offered by risk pools represents a pragmatic and actionable funding solution to vulnerable countries that can be potentially further scaled up with the new Loss & Damage Fund.

Furthermore, donors announced additional contributions to the Global Shield Solutions Platform: the EU Commission commits 30m EUR, France contributes another 20m EUR in addition to earlier committed 20m EUR. Luxembourg contributes 3m EUR in additional to Ireland’s contribution of 5m EUR joining the group of contributors just before COP28.

Dr. Astrid Zwick, Co-Director of the Global Shield Secretariat said:

“There is a longstanding collaboration of actors in the CDRFI space, including the Frankfurt School and Regional Risk Pools. With the Global Shield, we can take this collaboration to the next level. As one of the financing vehicles, the GSSP fosters the development of needs-based and demand-driven sustainable solutions in a targeted way.”

Isaac Anthony, CEO CCRIF SPC said:

"The amount of risk exposure of countries participating in CCRIF exceeds $1.2 billion USD, actually more than double the initial estimate, and it is likely that the frequency and intensity of meteorological events will increase more. This is where the Global Shield Programme for Resilient Risk Pools comes in; we want to close the gap by providing additional resources to our countries and to the risk pools.”

Lesley Ndlovu, CEO African Risk Capacity said:

“The Global Shield Programme for Resilient Risk Pools can help us deliver at scale, diversify, and become more responsive and efficient.”

Mr. Aholotu Palu, CEO Pacific Catastrophe Risk Insurance Company said:

“We share common challenges among the risk pools. We hope the GSSP can help improve affordability through premium support and technical capacity building.”

Mr. Yoshihiro Kawai, Chair SEADRIF Insurance Company said:

“The Global Shield Regional Risk Pools Programme is an important new source of support for risk pools to rapidly respond to emerging opportunities and needs. The focus on enabling joint solutions with our partner risk pools is especially valuable to bring more efficient capital, technical innovation, and knowledge to our member countries. It is crucial that the program's operational implementation maintains the flexibility and responsiveness that allows efficient solutions in the face of growing climate risks.”

The event aims to strategically raise awareness and explore the collaborative partnership between the transformative Global Shield against Climate Risks, the Global Shield Solutions Platform, and the Regional Risk Pools. It emphasizes their shared commitment to strenghten vulnerable countries' financial resilience against climate and disaster risks.

Hosted by the Global Shield Solutions Platform and the Regional Risk Pools and backed by the Global Shield Secretariat, this event will provide a platform to discuss the support Regional Risk Pools require and will have access to under this new programme of the Global Shield Solutions Platform.

With the support that becomes available with the launch of the programme, the Regional Risk Pools will be able to significantly amplify their efforts, expand their offer to member countries, and strengthen their capacities in developing insurance solutions aimed at protecting countries from the impact of natural disasters.

Furthermore, the event will raise awareness and deepen public understanding of the vital contribution of Regional Risk Pools, the Global Shield Solutions Platform, and the Global Shield to addressing losses and damages caused by climate change by fostering pre-arranged finance solutions.

Regional Risk Pools are a central part of the global disaster risk finance architecture. They provide climate-vulnerable countries with financial protection at reasonable costs through sovereign parametric insurance products. Current regional risk pools include the CCRIF SPC formerly The Caribbean Catastrophe Risk Insurance Facility, ARC, (African Risk Capacity), PCRIC (Pacific Catastrophe Risk Insurance Company), and SEADRIF (Southeast Asia Disaster Risk Insurance Facility).

Climate risks continue to increase, particularly for lower income countries and vulnerable communities leading to more frequent and intense extreme weather events. In response to the mounting losses and damages due to climate change, the Vulnerable Twenty (V20) Group of Ministers of Finance and the G7 agreed to work towards a Global Shield against Climate Risks. Through its financing vehicles, the Global Shield will provide coherent, sustained, and better-coordinated financial protection against climate risks.

The Global Shield Solutions Platform (GSSP) is a multi-donor grant facility and one of the central financing vehicles of the Global Shield. It is mandated to support Global Shield partner countries in developing and implementing financial instruments that provide better preparedness and more reliable disaster response. Increasing pre-arranged finance, which disburses funds quickly and reliably before or just after disasters happen, like regional risk pools, contingency funds or shock resilient loans, can lower the impacts of disasters, make vulnerable countries’ economies more resilient and thus save lives and livelihoods in vulnerable countries.

The GSSP provides comprehensive support to vulnerable countries. It offers advice and grant funding for research and education as the groundwork for locally adapted financial solutions. Furthermore, funding the development and subsequent application of climate and disaster risk finance and insurance solutions the GSSP contributes to increasing financial protection of vulnerable countries.

The GSSP is managed by Frankfurt School of Finance & Management. Its initial financial contributors are the Federal Republic of Germany, France and Denmark.

Sara Ahmed, V20’s Finance Advisor, said:

Time is not on our side and only waiting for solutions would be an injustice. The GSSP is a hallmark of collaboration among the climate vulnerable economies and advanced economies. The platform is a recognition that it would be unfair to let climate vulnerable economies whose people are least responsible for the crisis carry the risk of rapidly crumbling cliffs of financial and social protection. GSSP brings new resources to leverage the full potential of the pre-arranged finance toolkit to accelerate the building of protection systems.

Dr Bärbel Kofler, Parliamentary State Secretary to the German Federal Minister for Economic Cooperation and Development, said:

Increasing the resilience of vulnerable people in the Global South against climate risks is at the heart of the Global Shield against Climate Risks and a priority of Germany’s engagement on climate policy. Together with our partners, we therefore support the initiative and I congratulate the Global Shield Solutions Platform on its successful launch. GSSP is one of the central financing vehicles under the Global Shield and helps to avert and minimise losses and damages caused by climate change. With its needs-driven, inclusive approach, the GSSP will make an important contribution to achieving the Global Shield’s ambition to protect the lives and livelihoods of vulnerable people and communities.

Chrysoula Zacharopoulou, Minister of State for Development, Francophonie and International Partnerships said:

When it comes to facing climate change impacts, what we need is solidarity, confidence and inclusive protection towards the most vulnerable countries and communities. This is what the Global Shield is about, and this is the reason why France is committed to support this important and innovative initiative. On the pathway towards COP28 and a few days ahead of the Summit for a New Global Financing Pact in Paris, we need more than ever a collective, ambitious commitment to building global resilience and prosperity.

Lotte Machon, State Secretary for Development Policy, Ministry of Foreign Affairs of Denmark said:

The Global Shield Solutions Platform provides an important tool to scale up pre-arranged finance, which is critical in addressing the risks of loss and damage. Designed to increase the protection of climate vulnerable populations, the GSSP provides an important part of Denmark’s contribution for responding to loss and damage.

Dr Annette Detken, Head of the Global Shield Solutions Platform, said:

The Global Shield Solutions Platform represents a major step forward in giving the Global South a voice in jointly building local financial capacity and increasing the effectiveness and efficiency of post-disaster response. We welcome the opportunity to host the GSSP at Frankfurt School of Finance & Management. We build on our experience of providing sustainable and innovative Climate and Disaster Risk Finance and Insurance (CDRFI) solutions. We value the commitment and expertise of our contributors, and the important role of the V20 in setting up the Global Shield and supporting the GSSP.

Background

The Global Shield builds on the InsuResilience Global Partnership which the V20 and G20 previously introduced with a goal of protecting 500 million people in climate vulnerable countries by 2025. With its more systematic, coherent, and sustained approach, the Global Shield involves a more extensive strategy that encompasses a significant expansion of these endeavors in order to provide significantly more financial resources for shock-responsive social protection, early and anticipatory action protocols, and contingency funds, combining the forces of the V20, the G7 and further members.

Formed in 2015, the V20 Group of Finance Ministers is a dedicated cooperation initiative of economies systematically vulnerable to climate change. It is currently chaired by the Republic of Ghana. The V20 membership stands at 58 nations including Afghanistan, Bangladesh, Barbados, Benin, Bhutan, Burkina Faso, Cambodia, Chad, Colombia, Comoros, Costa Rica, Côte d’Ivoire, Democratic Republic of the Congo, Dominican Republic, Ethiopia, eSwatini, Fiji, The Gambia, Ghana, Grenada, Guatemala, Guinea, Guyana, Haiti, Honduras, Kenya, Kiribati, Kyrgyzstan, Lebanon, Liberia, Madagascar, Malawi, Maldives, Marshall Islands, Mongolia, Morocco, Nepal, Nicaragua, Niger, Palau, Palestine, Papua New Guinea, Philippines, Rwanda, Saint Lucia, Samoa, Senegal, South Sudan, Sri Lanka, Sudan, Tanzania, Timor-Leste, Tunisia, Tuvalu, Uganda, Vanuatu, Vietnam, and Yemen.

The Group of 7 (G7) consists of Canada, France, Germany, Italy, Japan, the UK and the USA. The European Union also participates in G7 meetings. Japan took on the presidency from Germany on 1 January 2023.