Disaster Recovery Funding

𝗕𝗟𝗢𝗢𝗠𝗕𝗘𝗥𝗚: The biggest spender on US climate disasters isn’t the insurance sector. It’s the federal Government and insurance is struggling to match the scale of the challenge. Since the year 2000, roughly $ 6.7 trillion has been spent on climate-related disasters, and a whopping $18.5 trillion on the full cost of disasters and recovery. The US dominates in what it spends on climate damages globally, representing 41% of global climate-related disaster spending. Another concerning trend is that these costs are accelerating. Bloomberg notes that US climate-related spending linked to disasters has now reached a new record. Over the last 12 months, economic damages from climate-related events have soared to just under $1 trillion. This represents around 3.3% of total US GDP, a hidden  'stealth tax' on taxpayers and consumers. Which means we are already forking out billions because of climate change. The data reveals that disaster costs in the US have almost doubled in the last decade compared to the previous decade. In the 2010s, climate disasters cost the US around $100 billion/year. This decade, the cost was closer to $200 billion. The insurance sector has failed to keep pace. Despite best efforts to increase coverage, the insurance sector is faltering. Bloomberg data shows that in the early 2000s, the total share of government-funded climate-related spending was around 11% of the total. Today, the share of government-funded climate disaster relief is now closer to 38% (see chart below). Today, one-third of the US economic expansion is being fueled by disaster response funded by taxpayers. Meanwhile, insurance premiums are soaring, and millions of Americans are losing access to affordable insurance. As premiums increase, this also contributes to inflation. 𝗠𝘆 𝗧𝗮𝗸𝗲 The US government has shifted from being the insurer of last resort to being the main financier of disaster recovery. We need to take a hard look at how climate risk is shared, priced, and planned for. We need to reconsider the playbook for risk-sharing and resilience financing. Here are my recommendations: First, policymakers should integrate insurance-based incentives for proactive resilience, mandating premium discounts for adaptation measures (mirroring OECD best practices). Second, a public-private reinsurance facility backed by granular, location-specific climate data could stabilise the market. Finally, tying future disaster aid to mandatory resilience upgrades, such as stronger building standards or floodproofing, would pivot federal spending from recovery to prevention. How do you think we build a system where risk is distributed fairly and resilience is rewarded? Source: https://lnkd.in/egkyFhpQ #ClimateEconomy #DisasterSpending #InsuranceCrisis #ClimateRisk #USPolicy #TaxpayerBurden #Adaptation ___________ 𝘍𝘰𝘭𝘭𝘰𝘸 𝘮𝘦 𝘰𝘯 𝘓𝘪𝘯𝘬𝘦𝘥𝘐𝘯: Scott Kelly

What happens after disaster: Why I’m excited about Climate Resilience Loans I just sat down for tea with my family in Altadena—they’ve lived here for years, but after the fires, they’re facing impossible questions: 🔥 Will our home still be worth anything? 🔥 Can we even get insurance next year? 🔥 Do we have to leave? I obviously don’t have all the answer, but I am excited about financial innovations that will accelerate after this disaster. Enter: Resilience-Focused Loans. Financing to Build Back Smarter Right now, if your home burns down, you have three bad options: 1️⃣ Rebuild the same way and risk losing everything again. 2️⃣ Sell at a loss (if you can even find a buyer). 3️⃣ Struggle to get financing because lenders see your home as too risky. Resilience loans change this. They offer better financing terms for homeowners who rebuild or retrofit their homes to withstand future disasters. Instead of just replacing what was lost, they fund the transition to safer, more insurable homes. 🏡 Fire-resistant materials (metal roofs, ember-resistant vents, non-flammable landscaping) 🌊 Flood protection (elevating homes, improved drainage) 🌪 Hurricane-proofing (impact-resistant windows, stronger foundations) ⚡ Energy resilience (solar, battery storage, heat pumps) The best part? It’s not just about safety—it’s about financial security. ✅ Homes built to be resilient hold their value instead of becoming uninsurable. ✅ Fire-resistant upgrades can cut insurance costs by up to 50% in high-risk zones. ✅ Every $1 spent on resilience saves $6 in future disaster recovery costs. The Bigger Picture: Why This Matters for Everyone Right now, we finance disaster recovery—but we don’t finance resilience. That needs to change. If we don’t rethink how we lend, insure, and invest in homes, entire communities will be abandoned to climate risk. Families will be forced to leave, not because of fire, but because their homes become financial liabilities. What if, instead of just paying for the next disaster, we funded a future where homes could survive it? This is why I’m excited about resilience-focused loans. It’s the kind of financial innovation we need to turn climate risk into climate resilience. Are you seeing innovations like this that could be helpful? #ClimateResilience #FinanceForGood #ResilienceLoans #Wildfires #HomeInsurance #Altadena #climatefinance Ashby Monk Mandi Ainslie Hunter Maats Andy Boyum Brooks DiPaula Caleb Neumeyer

Adaptation finance is core of climate investing, and it has become a genuine commercial opportunity. Glasgow Financial Alliance for Net Zero (GFANZ) has just published "Investing in Resilience," a report built on 22 in-depth case studies from banks, insurers, asset managers and blended finance vehicles around the world. A few things stood out to me: 🔹 Nearly half of the case studies involved purely private capital, with no public subsidy required. Adaptation finance is increasingly viable through conventional loans, bonds, equity and insurance, not just concessional funding. 🔹 About a quarter used labelled instruments like green or blue bonds, showing both conventional and labelled finance can scale resilience investment. 🔹 The strongest business cases come from "stacking" value: avoided losses, lower insurance premiums and new revenue streams combined, rather than relying on a single cash flow to justify the investment. 🔹 Where private returns alone don't clear the bar (often in emerging markets), blended finance and catalytic capital from MDBs and DFIs are what get resilience projects to bankability. 🔹 The projects span the full range of physical risk: catastrophe bonds for sovereign disaster response, water infrastructure, climate-resilient housing, aquaculture supply chains, agricultural resilience in Sub-Saharan Africa, and grid hardening against extreme weather, across both advanced and emerging economies. The throughline: financial institutions aren't waiting for perfect data to act. They're combining hazard data, geospatial analytics and direct client engagement to turn physical risk into numbers that credit and underwriting teams can actually use. Worth a read for anyone working at the intersection of climate risk and capital allocation. #climatefinance #adaptation #resilience #sustainability #gfanz #investing

Insurance and Climate: From Risk to Resilience As we enter Climate Week in the UK, the spotlight rightly shines on action — and the insurance industry has a unique, urgent role to play. Climate change is not a future risk; it’s a now risk. From floods in Europe to wildfires in North America and droughts across Africa and Asia, we are seeing firsthand how climate extremes are reshaping economies, threatening livelihoods, and straining the social contract. The Insurance Industry: A Hidden Superpower for Climate Resilience The insurance sector has always been about protecting people, businesses, and communities — but our impact goes far beyond claim cheques. We are increasingly central to building resilience, enabling climate-smart finance, and protecting investments critical for sustainable development. Three key areas of opportunity stand out: 1. Resilience Before Relief: The Power of Pre-Agreed Disaster Risk Finance Traditional aid is reactive, slow, and uncertain. But pre-arranged, parametric risk financing — like sovereign catastrophe bonds, insurance-backed social protection, and regional risk pools — is proactive, fast, and reliable. It helps governments and communities respond within days, not months, protecting lives and livelihoods. These tools help shockproof economies by reducing the fiscal burden after a crisis, while making countries more attractive to investors who need certainty. Insurance becomes a bridge between humanitarian response and market-based resilience. 2. Closing the Climate Finance Protection Gap Despite growing awareness, the climate protection gap remains staggering. Only a fraction of climate-related losses are insured, especially in vulnerable countries. To unlock the trillions needed in climate finance, we must pair capital with risk insight. Insurers can help de-risk infrastructure projects, model long-term climate exposures, and embed adaptation incentives in the design of sustainable finance — making sure green investment is not just ambitious, but resilient. 3. From Risk Takers to Risk Advisors The insurance industry is uniquely positioned to act as trusted advisors to governments, cities, and investors, helping to anticipate future risk and hardwire resilience into decisions. Our expertise in underwriting, modelling, and investment must be fully integrated into public-private climate strategy. The climate crisis isn’t just a scientific or political issue. It’s a risk management challenge at a global scale — and we know risk. We need to deepen partnerships — with governments, development banks, startups, and communities — to close the climate risk protection gap and make resilience investable. By leveraging our data, capital, and convening power, insurance can help drive a just, sustainable transition. We’re not just insuring against climate risk. We have the potential to transform the world’s approach to climate resilience.

What to ask before investing in a disaster-prone market Disaster risk isn’t just an insurance problem, it’s a capital risk. Whether it’s hurricanes, fires, or floods, here are the questions investors should be asking before wiring capital into high-risk areas: 1. What’s the insurance coverage and what’s not covered? → Are you relying on private insurance or a state-backed pool? → Is the deductible realistic? Has the operator budgeted for rate hikes? 2. Has the operator modeled a total loss scenario? → If a fire or flood wiped out the asset tomorrow, what’s the recovery plan? 3. Is the property up to modern code? → Rebuilds are expensive. Is the property positioned to avoid full retrofits? 4. What’s the evacuation or mitigation plan? → Especially for multifamily: Does the team know how to respond when disaster hits? 5. What infrastructure supports the area? → Can utilities, roads, and services handle disruption—or are you isolated? 6. What’s the true replacement cost? → The value of land post-disaster might not justify rebuilding. Know the math. 7. Is the market still investable or is it nearing uninsurable? → Some zip codes are becoming no-go zones. Be honest about the trajectory. This isn’t just about risk, it’s about responsibility. If you’re going to deploy capital, make sure the operator has asked and answered these questions. What’s one risk you think investors are still underestimating in today’s market?

Climate adaptation is not underfunded because solutions don’t exist. It’s underfunded because capital is still using the wrong instruments. The WRI working paper From bonds to blended finance shows that climate adaptation is already being financed — but not through a single, dominant model. Across 162 cases (2015–2025), the message is clear: adaptation finance works when instruments match risk, context and scale. So what can companies, investors and public actors actually do? Five practical directions emerging from the data: 1️⃣ Move beyond “one instrument fits all” The study documents 11 different financial instruments used across six physical climate risks. Blended finance, bonds, insurance, guarantees, equity and PES are not alternatives — they are complements, each suited to different risk profiles. 2️⃣ Prioritise ex-ante risk reduction, not only recovery 64% of cases focus on risk reduction, not post-disaster response. This reflects a simple reality: investments in resilience often deliver economic returns even when disasters do not occur. 3️⃣ Use blended finance to unlock private capital where risk is high Blended finance is the most frequently used instrument across income levels, especially in lower-income contexts. Public and concessional capital is being used strategically to de-risk projects and crowd in private investors, rather than replace them. 4️⃣ Scale through pooled and multi-country structures 75% of cases rely on pooled finance (funds, facilities, mechanisms, programs). Nearly half of all instruments now operate across multiple countries, enabling: risk pooling lower transaction costs faster replication 5️⃣ Match instruments to the type of climate risk The report shows clear patterns: insurance and disaster risk financing for rapid-onset shocks bonds, loans and blended finance for infrastructure and long-term resilience payments for ecosystem services and debt swaps for nature-based risk reduction Bottom line: The adaptation finance challenge is no longer about inventing new ideas. It is about deploying the right financial architecture at scale. For companies, investors and policymakers, climate resilience is increasingly a question of financial design, not only climate ambition. #sustainability #ClimateAdaptation #BlendedFinance #Resilience #SustainableFinance #RiskManagement #InvestmentStrategy #WRI

For those seeking NIH grant funding, there are changes to the review process, now called the Simplified Peer Review Framework. The 5 traditional criteria (significance, innovation, approach, investigators, environment) have been collapsed into 3 factors. While it may look the same on the surface, there are changes to the way each factor is defined and weighed. Below I outline the 3 factors and explain how they matter: 1. Importance. This is the single most important score-driving factor. The goal here is to demonstrate why the proposed work is significant. Why is your research important? What specific scientific or clinical gap does your study address? How will your work change clinical practice, scientific paradigms, policies? Innovation is part of demonstrating importance - but significance trumps innovation. The best overall score you can get for a proposal is bound by your importance score. 2. Rigor and reproduceability (R/R). This factor covers your methods. Obviously important to have strong methods but R/R don’t matter much if the proposal isn’t deemed important. A weak score on Factor 2 will bring down your overall score. 3. Expertise and resources. This factor covers the PI, co-investigators, other contributors, and institutions involved. Same as with R/R: it’s important to make sure your team has the necessary expertise, but a strong team can’t make up for an unimportant research question and a weak team will bring down your overall score. These were points covered during reviewer training held by NIH’s Center for Scientific Review - see link below for more info. Later this summer, I’ll have a chance to see the Simplied Framework in action. Would love to hear from those of you who’ve experienced the new review approach. Please comment below! https://lnkd.in/g_CWNMbn

If there’s one area where I believe the National Climate Resilience Framework lacks ambition and misses the opportunity for transformational change it’s with “Objective 3: Mobiliz(ing) capital, investment and innovation to advance climate resilience at scale.” Half of the proposals focus on securing capital, go-to-market pathways and patent reform for new resilience technologies and start-ups. Great ideas, but their impact will be marginal if communities are not equipped to buy or deploy the new tools. Imagine another world, though. One where common risk signals were sent by all financial actors. One where government capital was used surgically to attract and leverage private capital. And one where insurers were recognized as symptoms rather than the disease. That’s the future we should all aspire to. To get there, though, we must crack the code on how to monetize today the resilience dividends of tomorrow. Without this economic motivation I fear we will remain dependent on government grants and sub-scale philanthropic pilots. But it can be done. One way is to super-charge the recently implemented Community Disaster Resilience Zone Act by creating tax incentives to invest in climate resilience and adaptation projects in CDRZ designated communities, either by replicating existing programs or issuing transferable tax credit for a portion of the anticipated future savings generated by CDRZ certified risk reducing projects. Either way the point is to not leave CDRZ as merely a prioritization framework; make it the program that scales private sector investment in climate resilience. Another is for insurers to find ways to incorporate the risk reduction benefits of nature-based solutions and other community-level resilience projects into their modeling and pricing strategies. The reality is that we tend to rely on macro-level models that are not terribly effective at estimating micro-level risk reduction benefits, such as nature-based solutions. Guy Carpenter is exploring how community-based catastrophe insurance could help to cut this gordian knot. It’ll take some time, and a lot of trust, but if we can identify the hydrological standards and other key factors that would provide us the same level of confidence as current-state modeling the insurance mechanism could provide those system-level investment signals so desperately needed to attract private capital. Compare that to the simplistic but flawed assumption that deeper insurer discounts and more reporting will somehow achieve the scope and scale of system-level transformation that the Framework is otherwise promoting. Insurers can and will be part of the all-of-society answer to climate; the trick to unleashing their full potential, though, will be to imagine new system-level roles that monetize the resilience dividend and mobilize private investment. The recently released NIBS report does this well, and in the process sets a clearer path to sector-wide impact.

How can we bridge the "last mile" between satellite data and financial relief? My latest paper, published today in AGU Advances, documents the technical and institutional architecture of #Uganda’s Disaster Risk Financing Program. This work highlights the critical role of what I call #TranslationalGeoAI, moving beyond improved predictive modeling and datasets to create and connect insights with actionable systems that operate within national government frameworks and organizations that directly support communities. Using NASA's MODIS Satellite Data to trigger proactively Labor-Intensive Public Works (LIPW), proving that Earth Observation can drive significant fiscal and humanitarian benefits. Economic Impact: A $14M investment led to $40.7M in total benefits. Fiscal Efficiency: Achieved an Internal Economic Rate of Return of 28.2%. Humanitarian Outcomes: Reached over 452,000 people, resulting in a 7% increase in “better-off” households and significantly improved food security. The technology is ready; the primary challenge now is ensuring the sustained political and financial commitment needed to build capacity and scale systems globally. Full open-access paper: Lessons From Uganda's EO-Based DRF Program #GeoAI #DataScience #ClimateChange #PublicPolicy #RemoteSensing #Uganda