Experts urge insurance scheme for coastal communities

Experts at a roundtable on Thursday called for the integration of climate finance and insurance mechanisms for coastal communities, to be funded through compensation from the world's major climate-polluting countries.

Supported by CARE Bangladesh, An Organisation for Socio-Economic Development (AOSED) organised the "Sub-National Roundtable on Prospects of Pro-Poor, Gender Responsive, and Human Rights-Based CDRFI Mechanism in the Coastal Region" at a hotel in Khulna.

Shamim Arfeen, executive director of AOSED, moderated the programme.

He said the state should formulate an insurance policy for climate-affected poor communities and launch a climate insurance scheme by paying disaster insurance premiums with funds received as climate compensation from committed wealthy countries.

The country should be cautious to ensure that no loan or insurance premium burden falls on poor communities affected by climate change, he also said.

Centre for Climate Justice Bangladesh (CCJ-B) Research Fellow Moumita Das Gupta revealed the outcomes of a recent study titled "Study on Scoping of Pro-poor, Gender-responsive and Human Rights-based CDRFI in Coastal Region of Bangladesh."

The study found "multi-scalar inequities" in climate finance, calling for equitable and locally accessible financing structures.

Conducted under the Multi Actor Partnerships on CDRFI (MAP CDRFI) project by AOSED and CARE Bangladesh, it focused on the Khulna division, specifically Bagerhat and Satkhira districts, including Sarankhola and Tala upazilas.

Six unions - Rayenda, Southkhali, Dhansagar, Islamkathi, Jalalpur, and Khesra - were covered in the study through household surveys, focus group discussions, and key informant interviews.

The study found union parishads (UPs) lack financial autonomy, manpower, and the capacity to manage disaster-risk financing effectively.

It also observed limited public understanding of climate insurance, though there is strong community support for grant-based assistance.

Transparency and accountability issues hamper trust in local financing mechanisms, it said.

It assessed national mechanisms, such as social safety nets, microloans, and government relief reserves, as well as international funds like the Green Climate Fund (GCF), Fund for Responding to Loss and Damage (FRLD), and facilities under the United Nations Framework Convention on Climate Change (UNFCCC) and the World Bank.

Besides, it examined innovative instruments, including catastrophe bonds, parametric insurance, and carbon taxes.

The report recommended the institutionalisation of innovative finance tools and ensuring the integration of climate risk financing in the final National Disaster Risk Financing Strategy.

It also recommended exploring direct access modalities for Community-Based Organisations (CBOs) to national and international funds.

Palash Mondal from CARE Bangladesh said, "Disaster response is deeply intertwined with political economy. Unfortunately, much of our relief efforts are designed for public display rather than long-term sustainability."

He emphasised the need to shift from reactive relief to proactive resilience. "If we invest in innovative financial instruments, such as tailored insurance schemes, it could bring significant and lasting improvements to the lives of climate-affected communities."

Mondal also said insurance must be demand-driven.

"For example, the coastal fisheries sector is highly suitable for specialised insurance products. Similarly, other sectors and communities should be offered insurance based on their specific needs," he said.

"The desire and will to implement insurance solutions must be backed by technical capacity and regulatory frameworks," he further said.

He said research already shows the feasibility of such approaches.

"We now need proactive solutions. This includes developing the right rules, techniques, and business models. Different contexts require different types of insurance schemes."

He also stressed the importance of resilience-building through piloting and demonstration projects, which, he said, are "urgently needed to prove concepts and drive scalable impact."

Professor Dr Tushar Kanti Ray of the Department of Urban and Regional Planning at Khulna University of Engineering and Technology (KUET) said, "Given Bangladesh's geographical location and its proximity to the Himalayas, disasters are inevitable. Natural calamities and associated disruptions will occur. This is a reality we must accept. The key lies in adopting adaptive strategies through a multi-actor partnership model."

He emphasised that disaster risks must be addressed holistically, considering the loss of human lives, crops, fisheries, and livestock.

Rafiqul Islam Khokon, executive director of Rupantar, recommended aligning with the Southeast Asia Disaster Risk Insurance Facility (SEADRIF), noting that it could also enhance financial resilience against climate shocks and disasters.

Meer Rifath Jahan Usha, head of horticulture at Khulna Agricultural University; GM Mustafizur Rahman, scientific officer of Soil Resource Development Institute in Khulna; Rafiqul Islam, additional director of the Department of Agricultural Extension, Khulna region; and Bidyut Kumar Saha, chief engineer at Bangladesh Water Development Board (BWDB) in Khulna; also spoke at the event, among others.

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