BY JASMINE KHIN AND SWATI ARGAWAL
Climate insurance may not be the first tool that comes to mind when we think about building resilience. Yet, as our Climate & Communities Collective discovered, it may be one of the most transformative yet underutilised levers for supporting vulnerable communities in Southeast Asia and beyond.
As part of the Climate & Communities Collective, APC recently hosted a conversation with Charlie Langdale, CEO of Humanity Insured, a UK-based nonprofit rethinking how insurance can serve those on the frontlines of climate change. Drawing on over 30 years in the industry, Charlie shared a compelling vision: one where insurance is not simply a financial product, but a tool for empowerment, trust-building, and behavioural change—enabling both climate adaptation and resilience in local communities while helping to avoid long-term carbon lock-ins across various sectors like energy and agriculture.
From Top-Down Models to Ground-Up Solutions
Traditional insurance models are designed as largely top-down, focused exclusively on indemnity (compensation after loss), and most often exclude the most vulnerable communities. When disasters strike, traditional aid usually arrives too late—after lives are lost and livelihoods are shattered. As climate shocks become more frequent and intense, relying on these reactive approaches leaves most losses uncovered (the ‘protection gap’). In Asia, up to 83% of climate-related damages go uninsured, and in Southeast Asia, fewer than 1 in 10 people or business have any insurance at all.
Organisations like Humanity Insured are changing the game by going beyond the traditional top-down model and making the world’s most advanced insurance products accessible to the most vulnerable populations so they can plan, rebuild, recover and thrive in the event of climate shocks.
Rather than reacting to disasters and sending in loss adjusters to wrangle with the victims, as most conventional insurance policies do, these bespoke policies are designed to offer swift, guaranteed, preemptive payouts as soon as alarms are triggered by real time satellite data. Those payments provide a safety net that prevents the communities falling into a cycle of poverty and debt, and give them the confidence to invest in the future.
Insurance as a Tool for Systems Change
Several ongoing pilots across the region provide safety nets against various risks.
In the Indian state of Gujarat, for example, a bespoke insurance policy purchased by a small local cooperative, the Mahila Housing Trust, is protecting 26,000 women labouring in markets or building sites against extreme heat when temperatures cross a certain threshold. Similarly, in the Philippines, Blue Alliance is providing rapid compensation to restore marine ecosystems and support local businesses in the face of tropical cyclones.
One of the most powerful insights from these examples was also how insurance was not just supporting payout and livelihood, it was shaping people’s behaviour in the most unexpected way—in many instances, giving them the confidence to send their children to school knowing they will be able to pay the costs even if disaster strikes
Trust, Not Just Transactions
Another recurring theme was the importance of building trust. For many communities, there has historically been little reason to trust the insurance sector. Many may also be unfamiliar with the concept of insurance and lack an understanding of why they may need it. Yet, these communities often have a better understanding of the risks they face than external actors.
Effective solutions therefore should be built alongside communities, through time, humility, and sustained engagement. This involves educating communities about insurance and how it can serve as a tool for resilience, not just compensation, building confidence and trust over time.
Role of Philanthropy
This is where philanthropy and patient capital play a critical role. Many of these bottom-up approaches are not immediately commercially viable, particularly in their early stages. Philanthropic capital can therefore help fund experimentation, support community engagement, and enable models that prioritise long-term resilience over short-term returns.
As climate risks intensify, the question is no longer whether insurance has a role to play, but how it can be redesigned to better serve those most affected. Done well, it has the potential not only to protect but to fundamentally reshape how communities understand and respond to risk.
At APC, we are bringing together funders who want to learn more about using the tool of climate insurance to explore protecting communities in the region. We invite you to get in touch with Swati Agarwal ([email protected]) if you would like to learn more.