About
Fund structured by Zurich to support communities in emergency situations, especially due to climate catastrophes.
Innovation presentation
The Catastrophe Fund is an innovative approach by Zurich to deal with extreme events. The idea is to support communities affected by climate catastrophes or public calamities beyond insurance products, regardless of coverage by a policy.
Since 2019, the insurer had already been providing relief to people in socially-vulnerable situations, donating resources to disaster-affected communities based on a mapping and analyses of individual events, with the support of some local partners. Some examples of situations the company has acted upon include the collapse of the dam in Brumadinho, Minas Gerais (considered one of the biggest environmental and social catastrophes to ever occur in Brazil), and the Coronavirus pandemic, with donations of PPE to healthcare professionals, construction of beds in public hospitals, donation of food baskets to people in vulnerable situations, rapid tests for health centers, among other actions. The insurer also worked with several states affected by heavy rains, collaborating with the Civil Defense and partners to ensure basic needs reached the furthest corners of the country.
Sensing climate change brought new nuances to the patterns the insurer was used to, a decision was made in 2022 for the company to revisit its catastrophe response. Thus, a Catastrophe Fund was established prior to the events. With the increase in the number and severity of events, premises for assistance were defined according to the existing history, an annual value to be allocated was defined, and a national partner for the fund was sought. A checking account was also opened for the provision of resources. This set a much faster and more efficient protocol for the analysis, approval, and provision of resources. The process that would previously take 20 days from mapping to the delivery of financial resources was reduced to 3 to 5 days.
The premises defined for the use of the Catastrophe Fund are:
The state of public emergency or calamity must be declared through the issuance of an administrative measure for that purpose by the city or state;
The number of displaced persons must exceed three thousand;
The amount to be granted per person must be up to R$ 150, with a limit of R$ 600 thousand, per affected city/region.
Another evolution is that the insurer’s role is increasingly not limited to emergency assistance, with donations of food, clothing, and essential items: there is an expansion in the view and care to rebuild common spaces, so that affected communities can go back to what their reality was, as closely and quickly as possible. Health centers and schools were re-equipped, entire community spaces were built, and temporary healthcare structures provided.
Since 2019, more than 330 thousand people have been impacted by Zurich’s support actions, with an investment of over R$ 14 million to assist communities in public emergency or calamity situations in Brazil, resulting from events such as floods, overflows, and other adverse situations. In 2023 alone, over 125 thousand people were impacted by the resources channeled by the company through its Catastrophe Fund, totaling R$ 2.4 million. Populations affected by heavy rains in several Brazilian states were supported, as well as the Yanomami people, due to the humanitarian crisis that affected indigenous peoples during the first half of that year. In 2024, Zurich has already launched a new fund worth R$ 2.7 million, with the participation of Zurich Santander insurance company.
Uniqueness of the project
Given the intensification of extreme events driven by climate change around the world, the main uniqueness of the project is the design of a catastrophe response protocol that goes beyond serving the insurer’s customers (its role as a business), with a broader focus on community protection, extending its action to non-customers (its social role). By including a new participating insurer in the fund, in 2024, the initiative demonstrates adaptability to collaborative action, with the possibility of replication or expansion. Another relevant point is that the fund does not depend exclusively on technological advances, proposing a solid and preventive financial strategy and demonstrating that innovation also lies in intelligent strategies to face complex challenges.
