The concept of making money off disasters has a poor reputation. But obtaining sustainable private sector funding for emergencies has long been on the wish list of many professional humanitarians.
Now, with government aid budgets increasingly strained, some humanitarians say they have found a new way to supplement their budgets with private money.
The International Federation of Red Cross and Red Crescent Societies launched a new kind of insurance policy designed for its Disaster Response Emergency Fund, dubbed DREF Insurance, with firms Aon and Lloyds on Sept. 6. The new instrument will help an additional six million people per year, quadruple the donations used for premiums, and save donors 15% on humanitarian aid funding, according to the people behind it. At the same time, they say, it will keep insurance companies coming back for more and potentially create a humanitarian market for insurance companies.