Syria drought insurance scheme could help protect development gains: IDF

By Henry Gale

Feb 17 - (The Insurer) - The new climate risk insurance policy for the World Food Programme's operations in Syria could help protect development gains amid ongoing humanitarian challenges, the Insurance Development Forum (IDF) has said.

Parametric Insurer reported last week that Swiss Re was backing the $9.25 million drought coverage, with charity Humanity Insured and the Global Shield Financing Facility providing financial support.

Now the IDF has revealed more details of the scheme, including that Hiscox and Howden were also involved in its development through the IDF Sovereign and Humanitarian Solutions Working Group.

The idea for the product was initiated when that working group discussed the need for climate financing in conflict-afflicted regions during the 2023 IDF Summit in Zurich. The IDF said the product it developed "will significantly enhance climate resilience in Syria, especially in light of the ongoing humanitarian challenges".

It is designed to activate payouts of up to $9.25 million in the event of a drought in key food-producing regions, which WFP can use to deliver aid to local communities. The IDF noted that in settings like Syria, political instability and ongoing crises can exacerbate the effects of climate shocks.

The IDF said: "With this insurance policy now active, WFP can respond quickly to protect food security and development gains, preventing vulnerable families from resorting to extreme coping strategies such as skipping meals, pulling children from school or selling essential livestock."

Ivo Menzinger, managing director of public sector business at Swiss Re and chair of the IDF's operating committee, said: "The launch of this innovative climate risk insurance policy for Syria represents a landmark achievement in delivering prearranged insurance finance to support vulnerable communities facing the impacts of climate change.

"This is a testament to the collective efforts of the insurance industry – in this instance Swiss Re, Hiscox and Howden – working with development partners, the public sector and donors to develop practical solutions that enhance resilience in some of the world’s most fragile regions. By ensuring rapid financial support when drought occurs, this policy demonstrates the power of collaboration in closing the crisis protection gap and strengthening food security.

"Effective climate risk insurance equips vulnerable populations with the resources to manage climate shocks, helping smallholder farmers recover from failed harvests and enabling governments and humanitarian agencies to mount timely and well-coordinated responses. When combined with broader risk management measures, such as social safety nets and community-led resilience initiatives, insurance plays a critical role in safeguarding livelihoods and ensuring long-term stability."