Impact evaluation of climate risk insurance approaches: Status quo and way forward

This discussion paper is a preparatory step for an impact evaluation of climate risk insurance products on the micro level that the Munich Climate Insurance Initiative (MCII) will conduct for the InsuResilience Initiative. This paper aims at contributing to the ongoing discussion of how to best measure the impact of climate risk insurance (CRI) schemes by:

• Summarizing the existing empirical evidence on CRI impacts: Evidence is scant but growing, and this paper groups the statistically significant effects reported in the analyzed literature in three categories: production strategies, coping strategies and wellbeing.
• Identifying gaps in the existing literature: This paper finds that so far, impact evaluations of insurance products have focused on single effects in the short term (e.g. invesment decisions or wellbeing effects). However, a comprehensive analysis from a resilience perspective is missing.
• Introducing an MCII approach to impact evaluation: A framework for the meansurement of resilience changes in the context of CRI at the micro-level which is both methodologically rigorous and feasible during the actual implementation of a CRI project.