The International Finance Corporation, the private sector arm of the World Bank, launched in December a programme to facilitate insurance against natural disasters and weather-related risks in developing countries. The Global Index Insurance Facility will pay out in case of events above a certain level of severity, without the need for verification of individual claims. The IFC claims this will allow insurers to extend cover to rural and frontier regions. However, as BWP’s 2009 briefing argues, such schemes could displace public or communal insurance schemes that are based on need rather than profit. They are “a step further in linking people’s livelihoods and well-being to international financial markets that are inherently volatile.” The European Commission committed €24.5 million as the first donor to a trust fund that will finance advisory services for governments undertaking necessary regulatory reforms.
IFC’s new private insurance facility for disasters stirs concern
12 February 2010