Climate risk insurance crucial for coping with future disasters

Climate risk insurance is needed to make it easier for the country's households to recover from extreme weather events and maintain food security, speakers said yesterday.

The virtual programme, styled 'Climate Risk Insurance and Payout of the Flood Insurance Product', was jointly organised by The Daily Star, the World Food Programme (WFP), and the Oxfam.

"Over the last few years, many lives and properties have been lost due to natural disasters," said Md Enamur Rahman, the state minister for disaster management and relief.

In each incident, the people living in coastal areas were badly affected by the loss of crops and fishing. So, in this context, climate insurance would create an opportunity for the victim to overcome their losses caused by a natural disaster, he added.

Bangladesh is very susceptible to climate change and is made considerably more vulnerable given that about half the population is employed by the agriculture sector, according to Piet Vochten, deputy country director of the WFP.

Therefore, most rural households, including landless farmers that work on leased properties, are most vulnerable to sudden climate changes.

"That's why we are working with Green Delta Insurance and other partners to figure out their problems. We are confident that we are on the right track and look forward to getting feedback from the people," Vochten added.

Farzanah Chowdhury, managing director and chief executive officer of Green Delta Insurance Company (GDIC), said that during a normal year, approximately 20 to 25 per cent of the country's total land area gets flooded in the monsoon season.

Besides, greater levels of inundation are not uncommon either. In 2020, the country experienced its largest flood in the last 20 years.

But over the past 40 years, the country has suffered at least seven major floods with particularly damaging events in 1988, 1998, 2004 and 2007.

"Those floods cost our economy a total of $8.4 billion," she said.

A viable, inclusive and disruptive business model, where all stakeholders operate independently without direct financial aid from donor agencies, is needed to address the issue.

"So, the government should subsidise the premium and claim aspects using a disruptive business model to bring in more partners," Chowdhury added.  

It is necessary to identify the risks and conduct joint activities at both the private and government levels.

In Bangladesh, research on risk management for climate change is needed to create a larger database at the academic level so that the people are better prepared, said Mahbuba Nasreen, a professor of the Institute of Disaster Management and Vulnerability Studies at the University of Dhaka. "There is no other alternative for ensuring economic safety for farmers and agro-traders," she added.

Rezaul Karim, head of programme support at the WFP, said food security is an important issue in the country, which just recently faced a number of floods that caused untold damage to farmers.

"We should find out how to develop our systems in a way that could improve the delivery of socials safety nets," Karim said.

Additional Managing Director and Company Secretary of Green Delta Insurance Syed Moinuddin Ahmed; REECALL-2021 Coordinator Harun-Or-Rashid; Head of Policy Influencing, Campaign and Communications of Oxfam S. M. Monjur Rashid; and Co-Founder and Director of WRMS Anuj Kumbhat were, among others, present at the event.