Floods Trigger Landmark Disaster Insurance Payout

In 2024, an unprecedented series of floods and landslides led to the first-ever multi-disaster insurance payout in the aid sector, as reported by the Red Cross. This highlighted the urgency for innovative financial solutions to address increasing relief demands caused by severe climate-related events.

In an unprecedented event in 2024, the world was ravaged by floods and landslides so severe that they triggered the first-ever multi-disaster insurance payout in the aid sector, a revelation the Red Cross shared with Reuters. This event underscored the pressing need for novel financial solutions to combat the escalating demands on relief efforts driven by climate-induced calamities.

The International Federation of the Red Cross and Red Crescent Societies (IFRC) pioneered this insurance initiative, partnering with broker Aon to create a policy that activates when disaster costs surpass a set threshold. This groundbreaking policy was prompted into action in September by the catastrophic Asian Typhoon Yagi, driving disaster expenditures beyond the 33 million Swiss franc mark, and leading to the release of over 7 million Swiss francs in aid.

These funds have been critical in assisting 1.5 million victims in some of the world's poorest areas, from flooded regions of Nigeria to those displaced by landslides in Nepal. Florent Del Pinto, head of the Disaster Response Emergency Fund, emphasized the significance of this financial buffer, asserting its role in addressing extraordinary needs amidst a backdrop of growing, unmet humanitarian requirements.

(With inputs from agencies.)