InsuranceERM's Global Climate Risk & Sustainability Awards

Sustainable insurance initiative of the year: WTW

WTW scoops the award for sustainable insurance initiative of the year for developing the world's first child-sensitive parametric insurance solution to support UNICEF's response to tropical cyclones.

The initiative has involved WTW designing and placing a parametric insurance programme for UNICEF that directs rapid post-disaster funding towards an estimated 13.5m vulnerable children, youth, and parents.

WTW explains that pre-arranged and trigger-based financial instruments for disaster response, such as parametric insurance, can enhance the resources available to the humanitarian system and do so in a quicker and reliable way.

This type of risk financing mechanism is crucial because children and youth are a critically vulnerable population group that are among the most affected by disaster risk and climate change.

For example, the global advisory, broking and solutions company noted that in 2022, UNICEF's Children's Climate Risk Index estimated 400m children are currently highly exposed to cyclones.

"We aimed to design a relatively simple parametric solution for UNICEF, though one that could appropriately proxy the funding typically required by UNICEF, working closely with national government in responding to tropical cyclone shocks," explains a spokesperson for WTW.

The index uses publicly available and globally consistent data sources and captures cyclone wind impacts on the child (0-17) population at high (100m) resolution. This impact index is converted into financial terms via a country-specific function which considers local circumstances that affect response costs.

At the request of UNICEF's country-based teams, the risk transfer programme includes a small, fixed "minimum payment" for any cyclone event affecting any part of the covered countries, the WTW spokesperson adds.

The judges chose WTW as the winner of the award because they described it as an important initiative, and one that extends humanitarian support using insurance to support the most vulnerable globally.