Expand climate risk insurance for vulnerable communities: experts

The government should remove barriers and formulate the necessary policies to introduce climate risk insurance (CRI) products, encouraging private insurance companies to enter the market, experts urged today.

The recommendations came at an event titled "From Risk to Resilience: Institutionalising Climate Risk Insurance into Bangladesh's Social Protection and Disaster Management Systems," jointly organised by the World Food Programme, Oxfam, and The Daily Star at The Daily Star Centre in Dhaka.

Experts also suggested the government consider value-added tax exemptions for micro-insurance, revise commission ceilings, and develop a targeted premium subsidy framework based on vulnerability and climate exposure.

Prof Suborna Barua, chairman of the Department of International Business at the University of Dhaka, said, "Opening reinsurance markets to more private or foreign firms will give insurance companies greater choice, improve service quality, reduce costs, and boost efficiency, including for CRI."

He added, "The government should formally recognise climate and disaster risk insurance in national plans and policies and provide fiscal incentives such as VAT exemptions. Better coordination between ministries is also needed to accelerate the adoption of CRI."

Bangladesh is one of the world's most climate-exposed countries, regularly facing floods, cyclones, storm surges, and unpredictable rainfall that threaten livelihoods, food security, and rural incomes. For millions of smallholder farmers and vulnerable households, a single climate event can destroy a season's income, pushing them further into debt and poverty.

Maribeth Black, Deputy Head of Programme, World Food Programme, said, "WFP is working closely with Bangladesh to design and test climate insurance products and to review existing policies and legislation to integrate CRI guidelines into future response mechanisms."

Tarik Ur Rahman, consultant at Green Delta Insurance, said, "With rising climate risks, GDI's proven, scalable, tech-driven, and farmer-centric model is ready for national and global replication, giving vulnerable communities the confidence to face an uncertain future."

Mohammad Emran Hasan, head of climate justice and natural resource rights at Oxfam Bangladesh, stressed, "The government and private actors must carefully introduce new insurance products into the market."

Imanun Nabi Khan, assistant country representative of FAO Bangladesh, noted, "Loss and damage are inevitable and must be accurately measured. During last year's floods, even households receiving remittances lacked basic resources and could not communicate with family abroad. This shows that money alone is not enough—precise data and technologies are essential."

Md Najmul Alam, deputy secretary to the Ministry of Planning, said, "Bangladesh is one of the world's most climate-exposed countries."

He urged development partners to work with the government to help cover part of farmers' insurance premiums, noting that the government already provides extensive subsidies.

M Aslam Alam, chairman of the Insurance Development and Regulatory Authority, said, "The current insurance law does not cover parametric insurance, but the proposed amendment to the Insurance Act includes it. Once approved, this will remove the legal barrier."

Muhammad Tanjim Ferdous, in charge of NGO and foreign missions at The Daily Star, moderated the event.