About

SIF at a Glance

Genesis of the Sustainable Insurance Facility

The SIF builds on the demand expressed by the V20 Risk Focus Group during the V20 Asia-Pacific Regional Meetings at the Asian Development Bank in Manila in 2017. Based on an early SIF concept note by the Principles for Sustainable Insurance Initiative of UN Environment (UNEP FI PSI Initiative), the UNEP FI PSI Initiative and the Munich Climate Insurance Initiative (MCII) further developed the SIF design together with the V20 Finance Advisor. Over the course of 2019, various V20 consultations, industry stakeholder consultations, and the preparation of a high-level background assessment informed the design of the SIF. During the Climate Action Summit in New York, the V20 then officially introduced the SIF at the SIF Kick-Off Event in September 2019, supported by contributions from representatives from the Marshall Islands, Bangladesh and Fiji, as well as Germany, the Asian Development Bank, KfW, the InsuResilience Secretariat and Global Parametrics.

Project Proposals Led by the V20 Finance Ministries

V20 country leadership will be key for the respective SIF proposal development processes. More specifically, SIF project proposals will be developed building on in-country consultations with Finance Ministries and other key stakeholders from the domestic insurance industry and key MSME sectors to identify target groups, concrete insurance needs and actions in line with the five SIF Action Areas. Involving finance ministries and insurance stakeholders early on through the SIF in-country consultations is instrumental to the SIF process, as it ensures country leadership not only through the guidance of the finance ministries, but also through identifying suitable, in-country implementation partners that can take on the specified tasks. In pursuing its objectives, the SIF collaborates with several funding vehicles and will contribute towards Vision 2025 of the InsuResilience Global Partnership.

Learn more on SIF Proposal Development and Engagement opportunities

The Process of SIF Project Pipeline Development and Engagement Opportunities

The identification of SIF project countries is based on the expression of interest through V20 member countries. Project pipeline development is intended to commence via two tracks:

Track 1: Internal, initiated by the SIF Project Office:

The SIF Project Office will coordinate closely with the V20 Secretariat and the Co-Chairs of the V20 Risk Group to gauge and identify national interest in SIF projects. Upon such interest expressed, the SIF Project Office will coordinate with the respective Finance Ministries to understand whether the ministry wishes to mandate the Project Office to either prepare a new, independent project proposal, or wishes for the Project Office to engage with and build on an already on-going project. As for the former, the Project Office will set up in-country consultations with relevant stakeholders and ministries to scope MSME insurance needs and extract key priority areas. Based on these consultations, a project concept note will be developed. To refine the details of the concept note and translate it into a full project proposal, the SIF Project Office will conduct a field mission, as part of which it may also identify implementing partners who may be interested in carrying out planned project activities.

Subsequently, the concept note will be developed into a fully-fledged proposal and shared with the respective Finance Ministry as well as with the SIF Advisory Group to facilitate final feedback and buy-in. Finally, the project proposal will be submitted to one of the funding vehicles (or other funding structures, if more appropriate). Depending on the funding guidelines of the respective disaster risk financing vehicles, the proposal may be tendered on behalf of the V20 or directly submitted through a previously identified implementing organization/s, endorsed and supported by the V20.

Track 2: External, initiated by interested implementing organizations:

Implementing organizations interested in or already working in V20 economies may also approach the V20 Secretariat and/or SIF Project Office with project ideas and concepts. The Project Office will then coordinate with the V20 Secretariat and the respective national Finance Ministries, including on whether the latter wishes to mandate the Project Office to coordinate the preparation of a new project proposal, or for the Project Office to engage with and build on an already on-going project. Upon expression of interest through the national Finance Ministry, the Project Office will initiate a process similar to the above, together with the interested implementing organization, if feasible. This entails in-country stakeholder consultations including the finance ministry to scope relevant insurance needs and extract key priority areas. Upon conclusion of these consultations, the interested implementing organization (IIO) will receive a SIF Concept Note and Proposal Template to elaborate planned activities, explain how they align with the SIF Action Areas and outline implementation arrangements. Upon approval by the SIF Project Office, the IIO will submit the project proposal to one of the funding vehicles (or other funding structures, if deemed more appropriate by the SIF Project Office), alongside official V20 endorsement and support.

Engagement opportunities with the SIF outside of Project Pipeline Development

In addition to welcoming the development of joint implementation proposals with IIOs, organizations can also support the V20 demand by driving research and evidence aligned with the SIF Action areas. Indicative topics include regulatory challenges regarding MSME access to financial services, MSME implementation of integrated risk management approaches, and analysis and assessment of promising avenues to anchor MSME insurance in policy objectives of V20 economies, including capital market development, resilience building for households and enterprises, industry growth plans, and other relevant frameworks. Further, IIOs are also welcome to align ongoing and planned project activities more strongly with the SIF Action areas and share their knowledge and experiences with the V20 Secretariat and in support of South-South learning initiatives of the V20.

Putting the SIF into Action: The SIF Project Office and Partners

The SIF is operationalized through the SIF Project Office hosted by the UN Environment Programme’s Principles for Sustainable Insurance (PSI) supported through the Munich Climate Insurance Initiative (MCII), and operate under the guidance of the V20. The work of the Office is included in the V20 Work Plan and currently funded by the German Federal Ministry for Economic Cooperation and Development (BMZ).

Hosted by PSI, the SIF Project Office can build on PSI’s positioning as a global convener to fulfil the core mandate of the SIF, which is developing country demand-driven proposals and functioning as an impartial matchmaker to link implementation demand and supply. The PSI’s global convening power and industry networks will furthermore support the SIF in building regional and local insurance capacities. Moreover, the SIF Project Office will leverage the PSI network to identify and realize collaborative potentials between the global and local industry and integrate PSI’s expertise on insurance industry perspectives on climate resilience and low carbon growth. Hosted in PSI, the SIF Project Office is also well-positioned to promote the V20’s sustainable insurance interests on a global level, including through the InsuResilience Global Partnership, the Insurance Development Forum, the Task Force on Climate Related Financial Disclosure and the Sustainable Development Goals.

LEARN MORE ON THE SIF PROJECT OFFICE AND ITS FUNCTIONS

The Project Office will consist of one Global Coordinator and three regional experts for Climate and Disaster Risk Finance and Insurance (CDRFI) for V20 members from Asia Pacific, Latin America and the Caribbean and Africa and Middle Eastern respectively. The tasks of the Project Office focus on demand-driven proposal development, enhanced by in-region presence through the regional CDRFI experts and based on preliminary scoping missions, in-country consultations with key stakeholders, specifically the finance ministries, and field missions in support of needs-based project design and the identification of implementation partners. The regional CDRFI experts will furthermore provide advice to ongoing implementation activities, including through research inputs where relevant, and together with the Global Coordinator, promote the sharing of experience and learning at the regional and global level. In addition, the Global Coordinator will oversee programmatic implementation, support intra-regional learning and CDRFI position-building within the V20 facilitated by the V20 Secretariat. The Coordinator will also engage with international agendas and debates on demand-driven climate-smart insurance for MSMEs and streamline SIF implementation activities within the international implementation architecture, including the InsuResilience Program Alliance.

SIF Flagship Initiatives as of 2021

The Vulnerable Group of Twenty (V20) Ministers of Finance from 55 countries is a dedicated dialogue and action platform that works on financial responses to maintain and strengthen fiscal stability and economic resilience in the face of climate change. This includes addressing investments to enable climate-proof growth, reduce exposure to transition and climate risk, carbon pricing, and tackling increasing cost of investment capital due to climate vulnerability. Complementary to these areas, the final priority field of the V20 is to enhance systematic, climate-smart insurance for MSMEs in vulnerable countries.