2024 triggers the first insurance payments for the Disaster Fund

NEW YORK, USA/GENEVA, SWITZERLAND – Media OutReach Newswire – November 21, 2024 – For the first time, an insurance payout was triggered by the International Federation of Red Cross and Red Crescent Societies’ Disaster Emergency Fund (“IFRC-DREF”), as requests for disaster relief and -have exceeded the “deductibility” threshold.

IFRC-DREF is a vital fund that provides immediate funding to National Red Cross and Red Crescent Societies when disasters strike, particularly for smaller-scale emergencies that may not attract global attention. Previously, the fund could dry up before the end of the year, prompting the IFRC to secure an innovative – and primarily for the humanitarian sector – indemnity insurance policy with Aon and reinsurers.

From the beginning of 2023 and for an annual premium of CHF 3 million, the IFRC-DREF “pot” was insured on an indemnity basis. A potential payment of up to CHF 15 million is available if, or when, claims to the IFRC-DREF fund due to natural disasters associated with the hazards reach a certain threshold – a “deductible” set at CHF 33 million in a calendar year. For the rest of the calendar year, IFRC-DREF’s additional claims for natural disasters are covered by insurance payments, up to a total maximum of CHF 15 million.

In 2023, the threshold was not met, so the policy did not pay out. But in 2024 it was, with allocations to respond to Super Typhoon Yagi in Asia last week pushing IFRC-DREF spending over the insurance trigger. Overall, there were nearly 100 separate IFRC-DREF allocations in 2024; combined, those to respond to the impact of eligible natural hazards exceeded CHF 33 million. When the National Red Cross and Red Crescent Societies make new requests to the fund in September, October, November or December, allocations to respond to natural disasters will be paid by commercial insurers, up to a ceiling of CHF 15 million.

IFRC Under-Secretary-General for Global Relations and Humanitarian Diplomacy, Nena Stoiljkovic, announced the insurance payout at an event at the United Nations General Assembly in New York on Wednesday. Before that, Ms Stoiljkovic said:

“The launch of the IFRC-DREF insurance policy is an important moment. For the first time, a single, worldwide commercial indemnity insurance policy will pay the emergency humanitarian costs of disasters. The magnitude of the needs caused by disasters in 2024 is serious. But the fact that insurance is helping with the burden is good news and proof that there are innovative financial solutions that we hope to develop in the coming years.”

The IFRC plans to develop its IFRC-DREF insurance to extend coverage beyond disasters caused by natural hazards – to epidemics and anticipatory actions, for example. He hopes grant donors will see the added value of contributing to the IFRC-DREF fund if their humanitarian contributions could be multiplied in particularly calamitous years.

Notes for journalists

In 2024, IFRC-DREF allowances have so far been paid for, among others:

• Maldives Red Crescent to help treat filariasis outbreak in January (CHF 299,986)
• The Chilean Red Cross will help fight the February fires (CHF 496,982)
• Eswatini Red Cross to help with drought response in March (CHF 546,683)
• Iraqi Red Crescent to help deal with April flash floods (CHF 499,900)
• The Honduran Red Cross will help it deal with a hospital fire in May (CHF 336,394)
• Armenian Red Cross to help respond to June floods (CHF 499,759)
• Venezuelan Red Cross after Hurricane Beryl in July (CHF 270,049)
• Philippine Red Cross after August floods (CHF 738,170)
• Cameroon Red Cross after September floods (CHF 421,471)

The largest allocation so far in 2024 was for the Sudanese Red Crescent after the September floods (CHF 943,271); the “smallest” allocation was to the Equatorial Guinea Red Cross after a shipwreck in July (CHF 24,962).

• More data is available by searching for “DREF” under “Recourse Type” at “IFRC’s Go Platform”
• 1 CHF = 1.19 USD
• IFRC-DREF Insurance is co-financed by the InsuResilience Solutions Fund (ISF) to support project preparatory work, insurance product development and refinement, and premium financing.
• IFRC-DREF insurance is also made possible by generous premium support, notably from the British Red Cross, the Danish Red Cross and the British Government (FCDO).
• IFRC-DREF has provided rapid and effective funding to local Red Cross and Red Crescent Societies before and after disasters since 1979. However, with the increasing frequency and intensity of disasters, particularly due to climate change, the demand for humanitarian assistance continues to increase .
• More information on IFRC-DREF insurance can be found here: IFRC-DREF insurance

For more information, interviews, quotes from IFRC-DREF partners or videos of IFRC and Red Crescent disaster responses, contact (email protected)

Hashtag: #Aon #IFRC

The issuer is solely responsible for the content of this announcement.