IFRC-DREF triggers insurance payout after disaster relief demands exceed threshold

The policy provides up to $16.92m in coverage.

The International Federation of Red Cross and Red Crescent Societies' Disaster Response Emergency Fund (IFRC-DREF) has triggered its first-ever insurance payout after disaster relief demands exceeded its deductible threshold. 

The IFRC-DREF provides immediate funding for National Red Cross and Red Crescent Societies to respond to smaller-scale disasters that may not attract global attention. Historically, the fund risked depleting before year-end, prompting the IFRC to secure an indemnity insurance policy with Aon and reinsurers. 

The policy provides up to $16.92m (CHF15m) in coverage if the fund’s annual natural disaster relief spending surpasses $37.22m (CHF33m). The annual premium for the policy is $3.38m (CHF3m). 

This year, the policy was triggered due to a high number of natural disasters, particularly the Super Typhoon Yagi. 

Nearly 100 IFRC-DREF allocations were made in 2024, with spending on natural hazard-related responses exceeding the $37.22m (CHF33m) deductible. The insurance payout will cover additional disaster relief costs for the remainder of the year, up to $16.92m (CHF15m). 

Looking ahead, the IFRC plans to expand the scope of its insurance policy to cover other types of emergencies, such as epidemics and anticipatory actions, alongside natural disasters.