Humanity Insured

Our Mission

OUR MISSION

Humanity Insured's mission is to stop climate disasters causing poverty in the most vulnerable communities by increasing these communities' financial preparedness.

WHY WE DO IT

Climate change disproportionately impacts the c.3.6 billion people who make-up the poorest and most at-risk communities. The costs associated with climate risks for these communities are projected to escalate steeply in the coming decades. By 2030 the impacts of climate change are estimated to cost developing countries between US$290 billion and US$580 billion annually, rising to between US$1,132 billion and US$1,741 billion by 2050 (R. Mechler, L.M. Bouwer, T. Schinko, S. Surminski, J. Linnerooth-Bayer (eds.), Loss and Damage from Climate Change: Concepts, Methods and Policy Options, 2019). The livelihoods of many in these countries are highly reliant on, and vulnerable to climate shocks. Yet the anticipatory risk-transfer and financial preparedness tools that are commonly used in developed markets, most notably insurance, remain out of reach for these communities. While 35% of the natural catastrophe-related losses globally over the last decade were insured, the figure for developing countries was less than 10% or even close to zero (Munich Re, Natural disaster risks - Rising trend in losses).

Providing insurance for these communities is crucial for both financial stability and well-being. It ensures quick recovery after disasters, reduces financial hardships, and promotes resilience (University of Cambridge Institute for Sustainability Leadership, Mutual microinsurance and sustainable development, 2016). Without insurance, these communities remain trapped in a cycle of poverty, unable to rebuild and recover effectively after climate-induced disasters. The absence of insurance exacerbates economic instability and vulnerability, making it difficult for these populations to achieve long-term development and progress.

This fundamental imbalance demands a solution whereby underserved populations are empowered to access the financial safety nets that make preparedness and resilience possible. Humanity Insured seeks to make this happen.

HOW WE DO IT

The most vulnerable communities on the climate crisis frontline are primarily excluded from the insurance market because the products and solutions are too expensive and not designed for the specific climate risks and impacts local communities are facing. Humanity Insured addresses these market failures by making climate insurance available and affordable at scale for the first time to communities at the greatest risk of climate-induced poverty in Latin America, Africa, and Asia. Through the robust safety net insurance provides we ensure smallholder farmers, coastal communities, urban workers, and displaced populations have the resilience to withstand the increasing risks posed by climate change and extreme weather events.

We do this by: 1. Mobilising philanthropic and private sector capital to pay a portion of the insurance premium and fit-for-purpose climate insurance solutions that prepare and protect communities. In some instances, we will also work with partners to create capital pools that provide guaranteed payments to communities when a pre-agreed climate event happens. 2. Funding climate modelling and analytics that enable communities to understand the climate risks they face. This access to information will inform decisions on how communities can best adapt and prepare. 3. Funding, alongside the insurance protection, a community's access to resilience building assets or training that reduce climate-related impacts on livelihoods. 4. Creating collaborative funding opportunities that provide protection to more people.

Financing for resilience building solutions is relatively accepted and covered by other funders from across the donor community. However, philanthropic funding for premium payments and capital pools for scientifically triggered, guaranteed financial protection is severely underfunded as many donors have not yet adopted it as common practice. Humanity Insured aims to fill this funding gap, therefore most of our grants will be allocated to the purchase of insurance (or other mechanisms of scientifically triggered, guaranteed financial protection).

Where possible we fund insurance that provides a layer of financial protection on top of adaption or resilience building efforts financed by another organisation (e.g., providing drought insurance in conjunction with another organisation's funding for better irrigation practices).

OUR IMPACT

In making insurance available at scale to the most climate-vulnerable communities, Humanity Insured will stop climate disasters from driving poverty by:

1. Providing financial security and protection that unlocks a virtuous cycle of investment and income growth, which secures livelihoods and improves lives. 2. Establishing guaranteed safety nets that empower communities to prepare for and recover after climate shocks. 3. Multiplying the impact and value of funds available for communities on the climate frontline by (i) re-directing funding towards pre-emptive solutions that build resilience, and (ii) leveraging funds from an insurance balance sheet to support community recovery after climate shocks.

By directing funds to the activities detailed above, Humanity Insured will help people grow confidence and resilience, so they can invest in everything from education to new farming techniques. For the first time, the global insurance industry is coming together with philanthropy and jointly backing an initiative to help protect the world and ensure everyone can progress.

Our short-term goal is to collaborate with insurance, philanthropy, and other private sector industries to leverage $2 billion of insurance capacity by 2030 for 10 million people on the climate-crisis frontline.