Project Summary

Pakistan remains one of the most climate-vulnerable countries globally. The catastrophic 2022 floods affected over 33 million people and resulted in economic losses exceeding US$30 billion. With insurance penetration below 1 percent, Pakistan faces the critical challenge of high climate risk with low financial protection.

The Pakistan Insurance and Risk Finance Facility (IRFF), implemented by United Nations Development Programme (UNDP) and funded by the Government of Germany (through BMZ), is part of UNDP’s global initiative to integrate inclusive insurance and disaster risk financing into development planning. The project aims to strengthen institutional capacity, drive innovation in insurance products, and create an enabling environment for risk finance integration into public financial management. IRFF supports the development of sovereign risk financing solution, promotes inclusive insurance, and drives national awareness and advocacy. Through strategic partnerships and targeted capacity-building, the project is transforming Pakistan’s insurance landscape and enhancing the financial resilience of vulnerable communities.

Objectives

• Provide technical assistance for sovereign risk financing and incubate inclusive insurance solutions.
• Build institutional capacity and understanding of insurance and risk financing across key government bodies.
• Promote demand and support regulatory reforms, research, and advocacy for inclusive insurance.
• Strengthen public financial management of disaster risks and integrate disaster risk financing (DRF) into development planning.

Outcomes

• A comprehensive diagnostic report released, supported by the UNDP-Milliman Global Actuarial Initiative, outlining the roadmap building actuarial capacity and deepening local insurance markets in Pakistan.
• Technical support provided to the Securities and Exchange Commission of Pakistan via a digitalization blueprint study and hosting of national consultations to advance insurance sector.
• Supporting design of a Tripartite Sovereign Risk Financing Solution with UNDP, BMZ and Insurance Development Forum.
• Support provided to the Ministry of Climate Change and Environmental Coordination in completing the in-country process of Pakistan Global Shield Against Climate Risks.
• Insurance Innovation Challenge is set to be launched [SE2] to scale-up context-relevant insurance products
• Training delivered to 55 stakeholders on climate and disaster risk financing and Insurance (CDRFI). Contributed to regional capacity development at the Jakarta Forum and conducted national consultations on women’s leadership in climate resilience, engaging over 200 participants.