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UK development policy shake-up: Role for risk transfer, cat bonds, private capital?

In a shake-up of the UK government’s international development policy as well as its approach to humanitarian and aid funding that will be announced today, Artemis understands there will be a nod to a growing role for insurance risk transfer, while the use of private capital from investors is going to be highlighted, suggesting catastrophe bonds could be an increasingly relevant and supportive structure.

We understand the wide-ranging development plan will have a focus on climate change and humanitarian aid, as well as concepts such as debt forgiveness triggered by the occurrence of extreme climate linked weather disasters.

Among sources we’ve spoken with, there is an overwhelming feeling that the new development policy proposal will place a significant emphasis on leveraging the private capital markets as a source of aid financing, as the UK government tries to protect a stance that has seen it roll-back the reliance on taxpayer funding.


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