Infobox: The ins and outs of climate insurance

Reinsurance:
Devastating natural disasters can wreak havoc totaling in the billions. In order to protect themselves from potential financial ruin, insurance companies have to demand very high premiums. But to keep the contributions affordable, insurers have contracts with reinsurers. This “insurance for insurers” comes into its own when damages are above and beyond a certain level. Munich Re, Swiss Re, Hannover Rück and General Reinsurance are among the largest reinsurers.

Munich Climate Insurance Initiative (MCII):
The project was founded in 2005 by Munich Re. Other organizations including the World Bank, PIK and the World Meteorological Organization (WMO) are also involved. The aim of the project is to use insurance solutions to respond to the increasing number of weather-related damages. Insurers, scientists, NGOs and financial institutes are all involved in the project, which is based at the Institute for Environment and Human Security at the United Nations University in Bonn (UNU-EHS). The MCII also operates on a political level through the implementation of measures and climate protection goals.

Microinsurance:
These offers are aimed at people who have no access to regular insurance. They operate with relatively small contributions and insurance sums, and are therefore tailored to the circumstances of poorer people. Low-earners can take out insurance for their lives, health or loss of harvest.