The United Kingdom will explore using its aid budget to buy insurance against expensive disasters in low-income countries to avoid sudden “spikes” in emergency spending that threaten to derail other programs.
The Foreign, Commonwealth & Development Office, or FCDO, has invited the insurance industry to come up with firm proposals, and the plan will be part of a new development blueprint to be launched by Prime Minister Rishi Sunak next month, Devex has learned.
Government officials see insurance as a way to ease the “unpredictability” of needing to respond to costly crises within a much-reduced humanitarian budget and regret going cold because of a “media outcry” after the idea was first floated six years ago, according to two U.K. officials who requested to remain anonymous.