This article from The Insurer describes how Guy Carpenter has begun testing the concept of its proposed Climate Resilient Development (CRD) Bond, with multiple stakeholders expressing engagement, according to Julian Enoizi, CEO Europe.
Developed alongside Dr. Franziska Arnold-Dwyer from Queen Mary University of London, the CRD Bond proposal combines community-based insurance with stacked investment and advanced funding for loss-prevention measures. The community-based coverage provided through the concept incorporates a project fund account for a pre-defined project designed to reduce exposure to future losses from the insured event.
Julian, who also serves as Guy Carpenter’s Global Head of Public Sector, indicates that insurers, reinsurers, service providers, the NGO (non-governmental organization) community, the World Bank and other development banks have shown interest in the program since it was unveiled in June.
“The rationale behind concepts such as this is to provide risk financing solutions, which include both payment of losses as well as an adaptation/mitigation component,” Julian explained. “Unless we adapt to a changing climate and mitigate the increasing frequency and severity of weather-related risks resulting from it, we are never going to win this race.”