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Canada to invest $50 million in G7 climate risk insurance initiative in developing countries


December 7, 2015   by Canadian Underwriter


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Canada’s Minister of Environment and Climate Change, Catherine McKenna, announced on Saturday that the country would contribute $50 million to the G7 Initiative on Climate Risk Insurance to help people in developing countries protect themselves against the economic consequences of more intense and increasingly frequent natural catastrophes.

Insurance helps poor and vulnerable countries build resilience to the impacts of climate change by covering a portion of the risks that arise from natural hazards and extreme weather events, such as severe flooding, droughts or heavy storms

“The risks and costs of climate change on developing countries are very significant and Canada is proud to do its part in providing greater access to insurance,” McKenna said in a press release.

Insurance helps poor and vulnerable countries build resilience to the impacts of climate change by covering a portion of the risks that arise from natural hazards and extreme weather events, such as severe flooding, droughts or heavy storms, Environment and Climate Change Canada said in the release. Together with the G7 and partner countries, “Canada is working to provide up to an additional 400 million poor people with insurance against the risks of climate change by 2020,” the ministry reported.

“Canada is a leading contributor in supporting climate risk insurance in developing countries, notably through its participation in the Caribbean Catastrophe Risk Insurance Facility,” the release said, adding that since its inception in 2007, the facility has made 13 payouts for hurricanes, earthquakes and excess rainfall totalling approximately US$38 million to eight member governments. Canada was also the largest contributor to the establishment of the Caribbean Catastrophe Risk Insurance Facility, providing $25 million from 2007-2012.

In addition, Canada will also contribute $10 million to the World Meteorological Organization to support better early warning systems in the most vulnerable communities under the Climate Risk and Early Warning Systems initiative. This funding contributes to the overall goal of assisting developing nations to become more climate-resilient.

Canada’s contribution to the G7 Initiative on Climate Risk Insurance will help to stimulate greater coverage of effective climate risk insurance markets in countries that are the most vulnerable to natural disaster. In doing so, the federal government said that it will work closely with all stakeholders by funding insurance policies.

The announcement is part of Canada’s pledge of $2.65 billion over the next five years to support developing countries’ transition to low carbon economies that are both greener and more climate resilient. The federal government calls the funding the “most significant Canadian climate finance contribution ever.”


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