MANILA, PHILIPPINES (9 November 2021) — The Asian Development Bank (ADB) today announced the commencement of a project to develop climate-smart insurance for micro, small, and medium-sized enterprises (MSMEs) in the Philippines to be administered through the Asia-Pacific Climate Finance Fund (ACliFF).
The climate-smart insurance project represents the first project under the Vulnerable Twenty Group’s (V20) new Sustainable Insurance Facility (SIF).
MSMEs remain underserved and, in some instances, unreached by insurance markets, leaving them highly vulnerable to climate and disaster shocks.
“Supporting the climate and disaster resilience of MSMEs not only supports the resilience of the overall economy, but indeed the business owners, employees, and the communities they serve, many of whom are vulnerable and low-income themselves,” said ADB Sustainable Development and Climate Change Department Director General Bruno Carrasco.
ACliFF is a multidonor trust fund managed by ADB. It was established with financial support from the Government of Germany’s Federal Ministry of Economic Cooperation and Development (BMZ), whose funding will support the climate-smart insurance program.
“Small enterprises frequently lack access to effective risk management tools, such as climate risk insurance, to protect against climate and disaster shocks. Promoting insurance access and adoption among small enterprises provides financial protection that helps to safeguard development gains and avoid reliance on adverse and less effective coping mechanisms. I very much welcome ADB’s support to respective V20 efforts; contributing to the goals of the InsuResilience Global Partnership,” said BMZ Director General Jürgen Zattler
By working to understand the risk management needs of MSMEs in the Philippines, the project will establish a viable and sustainable business case and model for climate and disaster insurance. The work will also explore solutions that address the gender-specific impacts of disasters affecting MSMEs. The program outcomes will contribute toward the InsuResilience Global Partnership’s Vision 2025 target to cover 500 million poor and vulnerable individuals against climate and disaster shocks by 2025.
Addressing the impacts of extreme weather events is one of four priority areas for the financial risk management products supported by ACliFF. The fund will also explore future collaboration with the V20’s SIF in other countries of Asia and the Pacific.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.