What is the product?

Aon’s budget insurance for natural disasters and climate change is a proactive public sector fiscal risk management tool that is designed to provide immediate funds after a disaster strikes, to support the associated response and the recovery efforts which complement property insurance.

When combined with a government’s disaster recovery funds, budget insurance can reduce the overall net impact on revenues and fees and provide coverage for non-reimbursable expenses following a natural disaster.

Using budget insurance to transfer the immediate fiscal impact, as well as the long-term recovery and resiliency needs, creates immediate opportunities for states, cities and quasi-governmental entities to reboot, rebuild and recover faster after the disaster strikes.

How does it support green outcomes?

Budget insurance creates greater flexibility to redirect funds to programmes and projects that proactively reduce risks, such as investments in climate adaptation and mitigation projects. This effectively helps state, local and quasi-governmental entities pre-position financial resources to reduce the impact of natural disasters and climate change on infrastructure, power grids, agriculture, natural resources and rising public healthcare costs.

How does it enable customers today?

Natural disaster insurance coverage, placed by Aon, can be available through a parametric trigger and per-occurrence basis, with the trigger being binary in terms of the nature of its payout.