Protection Gap Entities: Saving Disaster Insurance In A Time Of Climate Change?

Extreme weather disasters, such as floods, tropical storms and wildfires, are becoming more frequent and more intense. These disasters threaten both life and livelihood, causing the loss of homes and jobs that can scar the lives of those affected. Disaster insurance, by providing funds for reconstruction, plays an essential role in limiting these consequences of disaster. Yet, disaster insurance is under threat in many contexts, becoming unaffordable or being withdrawn entirely. In response, many countries have established ‘protection gap entities’ (PGEs); public-private schemes to keep disaster insurance available. PGEs rebalance the tensions (paradoxes) at the heart of insurance about who controls the insurance market, how much is known about disaster risk, and who should pay for protection. Drawing from our new book examining 17 PGEs operating in 49 countries around the world, I will explain why PGEs are vital in adapting to an increasingly disaster-prone world.