Highlights This paper analyzes how a portion of the current disaster risk finance architecture is serving developing countries. We focus on the three regional risk pools— CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility) (referred to throughout as “CCRIF”); African Risk Capacity (ARC); and Pacific Catastrophe Risk Insurance Company (PCRIC)—that offer parametric disaster insurance to developing countries. Disaster risk finance instruments, including insurance, should be deployed in combination to address the various “layers” of risk, but few countries appear to be following

There are many opportunities for the greater integration of Ecosystem-based Adaptation (EbA) and insurance for risk reduction, and many challenges that remain. The substantive engagement between the insurance and environmental sectors is relatively new. Thus, it is hardly surprising that few fully integrated Climate Risk Finance & Insurance (CRFI) & EbA products (e. g., reef insurance) currently exist, and that such solutions face some challenges. That said, there are many common interests and significant opportunities which could help improve integration of CFRI with EbA and more broadly

The high transaction costs of serving low-income clients in developing and emerging market economies demand innovative and technological advancements. Challenges that inflate operational costs include data collection, processing and management, premium payment mechanisms as well as claims verification and settlement. Index insurance products, mobile payment devices or more accurate weather and agricultural-yield information based on satellite data are examples of innovative approaches that can help to overcome these challenges.