Swiss Re launches Climate Adaptation Development Programme providing financial protection against weather risks in emerging countries
27 September 2007, Zurich
Swiss Re launched its Climate Adaptation Development Programme (CADP) at the Clinton Global Initiative 2007 meeting. The Programme is designed to develop a financial risk transfer market for the effects of adverse weather in emerging countries. In a first phase, it will aim at providing financial protection against drought conditions for up to 400 000 people in Africa.
Swiss Re has pioneered weather risk transfer instruments in low-income markets, starting in India in 2004. A total of 280 000 policies have since been sold to smallholder farmers. Earlier this month, Swiss Re announced that it had provided financial protection in the case of extreme drought to three village clusters in Kenya, Mali and Ethiopia.
Now, as part of the Clinton Global Initiative 2007 meeting in New York on 26 - 28 September, Swiss Re has launched the Climate Adaptation Development Programme (CADP), which is designed to provide financial protection against weather risks in emerging countries.
Under this programme, Swiss Re partners with Millennium Promise, a non-profit organisation which aims to lift rural African villages out of the poverty trap and the International Research Institute for Climate and Society, which has pioneered climate modeling and climate risk management approaches, and is part of The Earth Institute at Columbia University. The goal of this partnership is to develop and implement climate risk indices for all 12 clusters of Millennium Villages in Africa (Ethiopia, Ghana, Kenya, Malawi, Mali, Nigeria, Rwanda, Senegal, Tanzania and Uganda) which are home to 400 000 people.
Based on these climate risk indices, Swiss Re will design financial risk transfer instruments and bring them to the commercial financial market. Additionally, Swiss Re will financially support related research and risk assessment, and will engage in complementary corporate citizenship initiatives. The Climate Adaptation Development Programme is open for partnerships. Additional contributions to research, training or funding of risk transfer from public and private institutions are invited.
Ivo Menzinger, Head of Sustainability, Emerging Risk Management, comments: "Climate change is a fact and some of its consequences have become inevitable. Parallel to efforts that aim at reducing emissions we have to improve resilience against changing weather conditions, particularly in emerging markets. Our Climate Adaptation Development Programme will contribute to develop a risk transfer market that will ultimately help smallholder farmers buy agricultural inputs, overcome a lack of collateral, draw upon agricultural extension services and accumulate income."
As a major global reinsurer, Swiss Re is committed to taking a leading role in the climate debate. Swiss Re identified climate change as an emerging risk some 20 years ago, and the concern has since evolved into an important component of the company's long-term risk management strategy. Swiss Re has pioneered new products and novel approaches to the art of risk management in this field such as insurance-linked securities and weather derivatives. In 2003, to demonstrate its commitment to reducing emissions, Swiss Re became the first major financial services company to launch a voluntary programme to become greenhouse gas-neutral.
Notes to editors
Swiss Re is the world's leading and most diversified global reinsurer. The company operates through offices in more than 25 countries. Founded in Zurich, Switzerland, in 1863, Swiss Re offers financial services products that enable risk-taking essential to enterprise and progress. The company's traditional reinsurance products and related services for property and casualty, as well as the life and health business are complemented by insurance-based corporate finance solutions and supplementary services for comprehensive risk management. Swiss Re is rated "AA-" by Standard, Poor's, "Aa2" by Moody's and "A+" by A.M. Best.