Super Typhoon Yagi triggers IFRC insurance policy

Thanks to disaster relief demands in 2024 surpassing the fund’s $40m threshold.

The International Federation of Red Cross and Red Crescent Societies' (IFRC) Disaster Response Emergency Fund (DREF) has triggered an insurance payout for the first time, as disaster relief demands in 2024 surpassed the fund’s $39.27m (CHF33m) deductible threshold. 

The payout comes from a pioneering indemnity insurance policy secured by the IFRC with Aon and reinsurers. 

The DREF, which provides immediate funding for National Red Cross and Red Crescent Societies during smaller-scale emergencies, has faced increasing financial strain in recent years. In response, the IFRC introduced the insurance policy at the start of 2023, paying an annual premium of $3.57m (CHF3m). 

The policy allows for a maximum payout of $17.85m (CHF15m) if natural disaster relief demands exceed the $39.27m (CHF33m) threshold in a single year. 

In 2024, Super Typhoon Yagi pushed the DREF's natural disaster response over the threshold, triggering the insurance. 

By the end of September, the IFRC had made nearly 100 separate allocations from the DREF, with natural hazard-related responses surpassing $39.27m (CHF33m). 

Further requests for disaster relief for the remainder of the year will now be covered by the insurance, up to the $17.85m (CHF15m) limit. 

Nena Stoiljkovic, IFRC’s Under Secretary General for Global Relations and Humanitarian Diplomacy, announced the payout during an event at the United Nations General Assembly, noting that it marks the first time a commercial insurance policy will cover global humanitarian disaster costs. 

In 2024, DREF allocations have been made to various Red Cross and Red Crescent Societies, including $878,422 (CHF738,170) to the Philippines Red Cross for flood response in August and $1.12m (CHF943,271) to the Sudanese Red Crescent for flood relief in September—the largest allocation this year.