In November 2024, the International Federation of the Red Cross and Red Crescent Societies (IFRC) used its disaster insurance policy for the first time to respond to a series of natural disasters in Asia and Africa. The alarming increased frequency and severity of such extreme weather events and disasters comes with the paralleled increased cost of emergency response mechanisms.
In September 2024, the IFRC provided support to other disasters, including floods in Algeria, typhoons in Vietnam, and wildfires in Bolivia, which collectively impacted over 43 million people alone. That being said, the IFRC’s insurance policy pay-out was set off by the subsequent combination of Asian super Typhoon Yagi, a landslide in Nepal, and severe floods in Nigeria. The IFRC’s disaster response spending was pushed beyond 33 million Swiss francs, which triggered a payout of 7 million Swiss francs (7.9 million USD). According to the Red Cross, these funds have aided approximately 1.5 million individuals.
In its insurance policy with broker Aon, the IFRC created a contingency fund designed to bolster relief efforts when traditional funding mechanisms and local or municipal governments are financially overwhelmed. This approach, according to the Red Cross, ensures a more rapid and efficient allocation of resources.
Florent Del Pinto, head of the IFRC’s Disaster Response Emergency Fund, emphasized the unprecedented demand for aid in 2024. Pinto noted that such innovative financing solutions are necessary to meet escalating disaster costs. The proposed 2025 budget of 885 million Francs (1 billion USD) for the IFRC saw 390 million Francs (442.8 million USD) being allocated for “Disasters and crises” strategic priorities, with 100 million Francs (113.5 million USD) for “Climate and environment.”
A 2020 IFRC report listing out goals through 2025 included “[Mobilizing] 500 million Swiss francs [567.6 million USD] per year through IFRC mechanisms for National Society responses to crises and disasters (including 100 million via the DREF)” as well as “Reach 50 million people per year with support services, in-kind, cash and voucher assistance for emergency response and recovery (50% of assistance in the form of cash by 2025).”
The World Health Organization (WHO) has advocated for the consideration of climate change risks and low-carbon operations in health emergency and disaster risk management frameworks. This strategy involves developing national policies that enhance the resilience of health systems, ensuring they can withstand and effectively respond to climate-induced emergencies.
Climate change intensifies the frequency and impact of traditional natural disasters, as well as contributing to the emergence of new public health threats. While the IFRC has focused its reporting on natural disasters, rising rates of infectious diseases may come from extreme weather events. For example, Valley fever, a type of fungal infection, is rising in prevalence because of increased temperatures which favor the fungus’ spread. Projections indicate that the economic burden of Valley fever could reach $18.5 billion annually by 2090.
IFRC’s disaster insurance policy highlights the escalating fiscal impact of climate change on global public health. Financing mechanisms such as disaster insurance provide critical support for immediate relief efforts. However, it is becoming abundantly clear that communities and local health systems must actively include budgeting allocated to face climate-related disasters.
By Lois Angelo