Press release

Howden seeks to plug the disaster relief funding gap by unlocking private capital for social good

01.10.21

  • Howden
  • 3 minute read
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Howden will bring together leading voices in the public, private and charity sectors to explore alternative methods of financing disaster relief projects at COP26 event.

Howden, the international insurance broker, today announces its plans to drive forward the use of innovative financing models to help plug the c$20bn* disaster relief funding gap by bringing the discussion to the fore at the ‘World Climate Summit – the Investment COP’ (‘World Climate Summit’ / ‘the Summit’).

Howden is an official partner of the World Climate Summit (7th – 8th November 2021), one of the industry events organised alongside COP26. At the Summit, Howden Group CEO, David Howden, will present the case for creating sustainable business models that provide more funding, more quickly and efficiently, and that can be applied to all kinds of disaster relief projects.

In his keynote address, David Howden will share his thoughts on how, by adapting existing models to respond to emerging challenges, the insurance industry has the power to create markets that drive climate action and increase resilience in an increasingly volatile world.

Earlier this year, Howden collaborated with the Danish Red Cross and others on the world’s first volcano catastrophe bond. Under this new model, humanitarian aid funds are raised in advance and stretch up to 20 times further than traditional funding methods, whilst offering uncorrelated returns for investors.

Should any of the 10 named volcanoes covered under the bond erupt within the next three years, up to $3 million will be released immediately to the Danish Red Cross. No time is lost assessing the cost of recovery; as soon as the parametric triggers are hit, the pre-agreed funds are released.

Charlie Langdale, Head of Climate Risk and Resilience at Howden, explains: “We’re seeing a dramatic increase in the frequency and severity of climate-triggered disasters, and traditional forms of disaster relief financing simply can’t keep pace. We believe the answer to plugging the funding gap lies in creating scalable, sustainable markets for funding disaster response by unlocking private capital for social good.”

The Howden team will also host a discussion between leading voices from humanitarian organisations and experts from the public and private sector to explore the full potential this new model has to transform the way disaster relief is funded.

Howden explains: “There is a lot of focus on the role of financial institutions in the climate resilience conversation, but comparatively little on the insurance industry. Insurance tends to come into focus in two main areas: picking up the pieces after a disaster has happened, and the debate around whether insurers should continue to underwrite business for carbon intensive industries.

Howden explains: “There is a lot of focus on the role of financial institutions in the climate resilience conversation, but comparatively little on the insurance industry. Insurance tends to come into focus in two main areas: picking up the pieces after a disaster has happened, and the debate around whether insurers should continue to underwrite business for carbon intensive industries.

“What’s missing in this conversation, and what our industry must get better at promoting, is the role insurance has to play in helping society to build resilience against climate risk. Whether that’s by removing the financial barriers to sustainable energy projects; leveraging our data and risk modelling capabilities to help clients, industries and countries to better address emerging risks; or by transforming the way disaster relief is funded.”

*Source: United Nations Office for the Coordination of Humanitarian Affairs’ Financial Tracking Service.

MORE DETAILS ABOUT HOWDEN’S PARTICIPATION AT THE WORLD CLIMATE SUMMIT:

Howden is a partner to the official COP26 side event, World Climate Summit, which will take place in Glasgow from 7th – 8th November 2021.

On 7th November at 11:30am, Howden Group CEO, David Howden, will deliver a keynote speech ahead of the insurance industry panel session on the topic of investing for resilience.

On 8th November at 10am, Howden will host a panel session and group discussion session exploring the role of insurance and capital markets in addressing the disaster relief funding gap.

If you are already registered to attend the World Climate Summit in person, and would like to join the closed session on Unlocking private capital for social good: the role of insurance and capital markets in addressing the disaster relief funding gap, at 10am on 8th November, please contact COP26@howdengrp.com. Please note, there is a maximum capacity for this session and it will not be accessible virtually.