Alternative Risk Transfer (ART)
Instead of using traditional insurance (risk transfer) channels, which do not adequately meet the needs of the development sector, ART (in this context) refers to the practice of transferring the risks associated with undertaking humanitarian relief and development from NGOs and donors to other parties, such as reinsurers and social impact investors.
Allocating funds to predicted crisis situations that will require humanitarian aid when they occur. Release of funds happens ahead of an event - in response to a pre-determined set of criteria – with the intention of saving lives and mitigating the effects of the disaster by distributing the funds before it even strikes.
InsuResilience Global Partnership
Launched at the UN Climate Conference (COP23) in Bonn, in November 2017, InsuResilience is a response to the need for a more comprehensive approach to disaster risk management. Aimed at strengthening disaster preparedness, rapid response and recovery, the initiative seeks to enable more resilient economic development and help protect lives, livelihoods, businesses, infrastructure and public finances in the world’s most vulnerable communities. The InsuResilience Global Partnership for Climate and Disaster Risk Finance & Insurance Solutions brings together G20 countries, in partnership with the V20 nations, civil society organisations, the private sector and academia. Social Impact Partners is one of its forty diverse members.
An innovative type of insurance that covers a predefined humanitarian disaster happening, rather than the traditional insurance approach which covers actual losses (of insured assets) that may occur after a disaster has taken place. So, instead of receiving an insurance payout to compensate for individual losses incurred when the event happened, payment (up to an insured value) is triggered at the time that it takes place, to ensure funds are immediately available to help in any way they are needed. (A solution that means previously uninsured expenses can be covered.)
Sustainable Development Goals (SDG)
In line with the global challenges the world faces, the United Nations has developed a blueprint to achieve a better and more sustainable future for all and make sure no one is left behind. These are encapsulated in 17 interconnected goals, with the target to achieve them all by 2030. They are:
Good health and well-being
Clean water and sanitation
Affordable and clean energy
Decent work and economic growth
Industrial innovation and infra-structure
Sustainable cities and communities
Responsible consump-tion and production
Life below water
Life on land
Peace, justice and strong institutions
Partner-ships for the goals
Social Impact Bond (SIB) or Pay-For-Success Mechanism
A social impact bond is a novel form of investment vehicle, usually issued by public sector organisations, that presents a new opportunity for socially conscious investors to give back to their communities. Designed to fund improved social outcomes – in specific locations and situations – they attract investors who are interested in the social impact of their investment as well as a financial return. The concept is that repayment to investors is contingent on the specific agreed social outcomes being achieved by the implementing parties. Generally, investors provide the initial capital support and as outcomes are achieved governments or social enterprises agree to make payments on that basis, i.e. they pay for success.