Pre-arranged financing through macro-level disaster risk instruments, including catastrophe bonds and parametric insurance, are deemed a practical, scalable solution that can deliver financial support for early action to support recovery and resilience, the United Nations World Food Programme (WFP) has explained.
Laying out its approach to deploying Macro‑Level Disaster Risk Financing (DRF) in regions facing food security threats, including from climate and natural disasters, Lucy Bloxham and Michael Goode of the World Food Programme explain the rationale for the WFP’s use of risk transfer instruments, which comes at a highly-relevant time given its ongoing work on a food security catastrophe bond.
The WFP has been utilising parametric insurance arrangements for approaching two decades. Our first coverage of a WFP arrangement was a weather-index insurance research initiative back in 2008.
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