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Corruption risks and mitigation approaches in climate risk insurance

Without donor intervention, the costs of disaster insurance for poor communities bearing the brunt of climate change is prohibitive, and in general insurance coverage among the poor in developing countries is very low compared to OECD countries. Donor-supported initiatives that create new disaster insurance regimes for poorer countries, like any other kind of fund or fiduciary transfer, are accompanied by certain corruption risks. This Helpdesk Answer considers some of the central risks and discusses potential countermeasures. In identifying corruption risks in climate risk insurance, this Helpdesk Answer adopts a value chain analysis, which conceives of a sector in terms of the processes required to produce and deliver public goods and services. This response defines corruption as “the abuse of entrusted power for private gain” (Transparency International 2018).

27 December 2018
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Corruption risks and mitigation approaches in climate risk insurance

Main points

  • Value chain analysis is a useful way to map corruption risks at sector level (Campos and Pradhan 2007).
  • Risks can be characterised according to whether they occur at the stages of policymaking, organisational resources or client interface along the value chain (Transparency International 2017).
  • To gain meaningful insights, it is necessary to go beyond high-level mapping of corruption risks and conduct bespoke appraisals of different sectoral value chains.
  • Key remedies for corruption risks associated with this type of finance include greater claims disclosure, simpler contracts and an increase in civil engagement.

Cite this publication

Hewitt Jones, J.; (2018) Corruption risks and mitigation approaches in climate risk insurance. Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Helpdesk Answer 2018:23)

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John Hewitt Jones


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This work is licenced under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence (CC BY-NC-ND 4.0)