Support for sovereign climate and disaster risk functions: the Global Risk Modelling Alliance

• MoFs can lead in bringing together the components needed to calculate catastrophe risk across public institutions. They should manage this process not as technical experts but as risk managers, defining the right questions for adaptation planning and commissioning analysis with the necessary support. Nonetheless, they should be able to interpret results, understand any remaining uncertainties, and develop a policy or make a decision on this basis.
• Critically for MoFs, (re)insurance-style risk models contain a financial module that can indicate thresholds for risk retention or risk transfer for more extreme events.
• Policy questions raised in GRMA workshops have covered both the relationship between national disaster risk reporting and sovereign credit ratings and what impacts governments may care about most. Technical questions have included how to prioritize and plan a range of responses to risk, where to source data, and how to make decisions under uncertainty.

The GRMA operates at the request of countries, and each program is co-defined with a locally-led technical working group. Typically, under the mandate of the MoF, the GRMA initiates its work by bringing together ministries, departments, agencies, and research institutions to develop a synthesis of prioritized risk questions and the modeling required to address them.

The GRMA’s work to date shows the importance of prioritizing owning the problem, embracing the idea that MoFs can have a leadership role in bringing together the best of global and local, public and private, and recognizing the need for a continuously developing view of risk as a core function for MoFs.

The GRMA is funded by the German government and hosted by the InsuResilience Solutions Fund at Frankfurt School of Finance and Management.