annual report 2006

Munich Re Foundation From Knowledge to Action

2006 report

Contents

Research

Networking

Sensitisation

Action

Review of 2006

Editorial

Prof. Hans-Georg BohleSocial vulnerability: Learning to live with risk

Pioneers of researchInterview with Dr. Koko Warner

Vulnerable but not defenceless2006 Summer Academy

Ten pillars of social vulnerability

Thomas LosterTogether we can beat the drought trap

Creative solutions to fight povertySecond InternationalMicroinsurance Conference

Banker to the poorNobel Peace Prize 2006

First microinsurance compendium25 case studies from four continents

Protecting the poor – A microinsurance compendium

Prof. Gerhard BerzAvoiding the uncontrollable – Controlling the unavoidable

Climate protection feverSchools competition

Lessons from spaceClimate expedition project

Forewarned is forearmed Dialogue forums on the risks of living inMunich

Wolfgang StiebensMozambique – A land of many faces

All systems runningMozambique flood-warning system

Hand-drawn maps a key feature

Fog nets in Eritrea:We never thought of giving upInterview with Kerstin Anker and Ernst Frost

Tonga’s early-warning system to go on air2006 Foundation Prize

Other foundation projects in 2006

Board of TrusteesTeam

Publications2007 overview Picture credits and sources

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40CoverWomen in a sandstormin Kenya: Drought is arisk for many countries.Often, after waiting yearsfor rain, people in thesemi-arid zones of Africaare faced with a deluge.The rainbow signals the long-awaited end ofthe drought.

Success stories and anxious moments

The foundation’s second year was, to a large extent,devoted to consolidating the projects launched in theprevious year. Significant progress has been achieved,for instance in transforming our microinsurance con-ference into an international platform, microinsurancebeing an issue that is assuming growing importance in many countries (page 16). Our disaster managementwork has also borne fruit, while research into differentaspects of social vulnerability forms an ever denser andmore widespread network (page 6). The foundationcovers a broad spectrum, sponsoring ten projects in all,some of them interrelated.

However, last year was not without its anxious moments.On a positive note, the new District Administratorresponsible for the River Búzi gave his blessing to theMozambique flood-warning system, pledging continuedsupport (page 34). On the other hand, new directives and laws cast a shadow over the future of the Eritrean fog nets project coordinated by the WaterFoundation(page 36).

In the meantime, although at this stage it is very difficultto say precisely when the Tonga early-warning systemproject will be in operation, we are hoping for a 2007launch (page 38).

The dialogue forums have now become an establishedpart of the foundation’s work on the local level. We willcontinue to organise them in the future in order to raisepublic awareness of issues that concern the foundation(page 26). In support of the UN Decade of Educationfor Sustainable Development, we are expanding ourinvolvement with schools (pages 24 and 25) on the national level. To raise our international profile, our over-seas projects will for the time being focus on disastermanagement and water as a resource and risk factor aswe continue to be active primarily in Africa.

Thomas LosterChairman of the Munich Re Foundation

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Munich Re Foundation/2006 report

March April July August September

13 –15 March Strategy meeting of UNU Chair network: Defining 2006–2009research strategy forsocial vulnerability, in Yautepec, Mexico

Page 6

27 March First Munich Re Founda-tion prize awarded: €50,000 presented to theKingdom of Tonga’s optimised storm-warn-ing system at the ThirdInternational Conferenceon Early Warning inBonn

Page 38

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23 –29 JulyFirst Summer Academyon social vulnerabilitystaged with the UnitedNations University (UNU)at Schloss Hohenkammernear Munich

Page 8

22 August“Climate and water-related risks” seminarheld at the StockholmWater Week 2006

Page 39

21 September – 28 NovemberDialogue forums “Therisks of living in Munich –Perceived and actual”,co-organised by the GSF – National ResearchCenter for Environmentand Health, held at theBavarian State Library inMunich

Page 26

26 AprilThe winners of theschools competition“Young people withboundless energy – Protect the climate!”organised in conjunctionwith Zeitbild Verlag inBerlin

Page 24

October November Review of2006

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29 September– 18 DecemberGermanwatch “Climateexpedition”, at schools in North Rhine-West-phalia and Bavaria

Page 25

21–23 NovemberSecond InternationalMicroinsurance Conference “Making insurance work for Africa” in Cape Town,South Africa

Page 16

Publication:Protecting the poor – A microinsurance compendium

Page 18

Commissioning of theBúzi flood-warning system, handover of a water level gauge onthe river

Page 34

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9

Research

One of our core objectives is to research the vulnerability of people in risk situations. The photograph shows the inhabitants ofCholuteca, Honduras, surrounded by whatremains of their homes following a hurricane.Supplying water to people affected by naturalcatastrophes is always a critical issue.

The degree of vulnerability results from theinteraction between the two. It is always particularly high when considerable dangerpotential is combined with a limited capacityfor coping and adapting. On the other hand,vulnerability is low if a minor degree of threatis matched by a high capacity for adaptation. If that is the case, we can talk about security.(Figure 2)

Let us concentrate on social vulnerability. Howcan the fraught relationship between socialvulnerability and human security be deter-mined and measured? Are there certain con-stellations in which the existential threatoutweighs man’s ability to act? How can thethreats themselves be reduced? What circum-stances help or hinder human ability to livewith risks? What groups are particularly vulnerable and in what parts of the world?How can we strengthen people’s ability toadapt to and cope with threats such as naturalcatastrophes? And what factors actually makeup human security?

Research – Three missing elementsA great many research projects and develop-ment programmes already address theseissues. Despite an almost overwhelming abun-dance of detailed information, there are threemissing elements:

— A systematic breakdown of the variousaspects of vulnerability that takes sociologicaltheories into account

— A specific study of those aspects with theaid of empirical research in a particularly high-risk context, such as natural catastrophes

— An attempt to find vulnerability or humansecurity indicators which enable us to makegeneralisations and to measure and predictsocial vulnerability as far as possible

4The concept of vulnerability is very high on theagenda at the moment. It originally came up inthe 1980s in the environmental, social andengineering sciences context, and now currentresearch in this field focuses on three areas –ecology, society and technology. It owes itspopularity to its close association with thediscussion about the risk society. As a result ofecological, technological and sociologicaldevelopments, more and more people believethemselves exposed to new risks, some of which threaten their very livelihoods, andmany wonder what they can do about them.“Living with risk” is therefore a key concept interms of how we deal with potential risks, suchas natural catastrophes.

Threat and preventionThe concept of vulnerability always has twoaspects: the nature and degree of threats in theglobal risk society and how not only peoplebut also ecosystems and technical structurescope – or fail to cope – with them. In essence,social vulnerability is a dual structure con-sisting of an outer facet, indicating the degreeof danger, and an inner one, reflecting thepossibilities that the people affected have ofliving with or surviving it. (Figure 1)

Prof. Hans-Georg Bohle Social vulnerability: Learning to live with risk

Figure 1

Dual vulnerabilitystructure: The externalfacet, which shows thedegree of danger and theinternal, which showsthe capacity of thepeople concerned forcoping and adapting.

SourceHans-Georg Bohle, 2006

Vulnerability of ecosystems

Coping by ecological adaptation

Threat to ecosystems

Coping through social action

Internal facet

External facet

Copingby means of technicalmeasures

Threatto society

Threat to technical structures

Social vulnerability

Technological vulnerability

Research

The holders of the Foundation Chair on Social Vulnerability are seeking answers to these issues alongside scientists at the United Nations University, examining theoreticalapproaches that could explain social vulner-ability for systematisation purposes. Scientificpapers reveal the complex interrelationshipsinvolved and endeavour to formulate generalapproaches to social vulnerability in the formof models.

In the fieldwork area, the annual summeracademies organised at Schloss Hohenkam-mer by the Munich Re Foundation and UNU-EHS and presided over by the holders of the Foundation Chair provide an opportunityto compare and discuss current papers onselected problem areas by top doctoral can-didates from around the world. The 2006Summer Academy addressed the issue ofvulnerability in the context of global watercrises. The main item on the agenda for 2007 is megacities. Looking further ahead, thetopics planned for 2008 and 2009 are the inter-national refugee issue and global climatechange, respectively.

One of the concerns of the annual UNU-EHSExpert Working Groups, to which the Chair-holders also contribute their expertise, is howto remedy the lack of indicators and modelsthat can be used to measure vulnerability.

Work on all aspects of social vulnerability hasshown that “living with risk” needs to bebased on coping strategies and adaptationtechniques. The main objective with regard tothe most vulnerable population groups inhigh-risk areas is to analyse their capacitiesand options as accurately as possible in orderto provide appropriate help and support.Furthermore, it has often been found thatintangible factors make it easier for thepoorest of the poor to live with risk. For ex-ample, their ability to prevent or cope withrisks often depends on rights of access to landand other natural resources.

At the same time, education and health play a very important part in the ability to success-fully adapt to risks. Social networks, familyties, self-help groups, friends and acquaintan-ces, neighbourhood associations and savingsclubs often constitute the main insurancemechanisms.

Human security and quality of lifeOn the other hand, human security goes farbeyond such aspects as physical well-being,food and health hygiene, adequate accommo-dation and help in need. Human security alsodepends on the social standing of those con-cerned within the community. This is related to the various opportunities for self-determin-ation and involvement in decisions on how to deal with risk. Ultimately, the deciding factoris to what risk prevention and risk managementrights people have a claim in society.

The scientific study sponsored by the MunichRe Foundation aims to apply the findings insuch a way that the most vulnerable are able to live with risk by their own efforts and inaccordance with their own ideas. That thereare no patent recipes quickly became appar-ent. Tailored solutions are called for, based onthe social, political, economic and, not least, cultural context.

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Prof. Hans-Georg Bohle

The Professor has occu-pied the Chair of CulturalGeography and Devel-opment Geography atthe Department of Geog-raphy, University of Bonn,since 2004. He wasappointed to the Chairon Social Vulnerability at the United NationsUniversity (UNU-EHS),which is financed by theMunich Re Foundation,for the academic year2006/2007.

Figure 2

Factors that determinevulnerability and secur-ity: The degree of vulner-ability results from external and internalparameters. A keycomponent is the resili-ence of the peopleaffected or their ability todeal with the impacts.

Vulnerability:

SourceHans-Georg Bohle, 2006

Vulnerability of ecosystems

Capacity for absorbing shocks

High

Low

Forc

e o

f sh

ock

an

dd

egre

e o

f exp

osu

re

Capacity for coping and adapting

Capacity for withstanding shocks

Ecological resilience

Human security

Technological robustness

Social vulnerability

Technological vulnerability

Vulner-ability

+/–

Security +/–

Vulner-ability

+/–

Security +/–

Vulner-ability

+/–

Security +/–

Pioneers of researchInterview with Dr. Koko Warner

Dr. Koko Warner is an academic officer at theInstitute for Environment and Human Securityof the United Nations University (UNU-EHS).In this capacity, Dr. Warner also serves asscientific adviser and coordinator for the Chairon Social Vulnerability, established by theMunich Re Foundation in 2005 in order toprovide training for international students inthe various aspects of disaster managementand prevention.

The concept of social vulnerability has existedfor some time. What has sparked the renewedinterest in researching this topic?

Social vulnerability arises out of deficits –financial, institutional or knowledge deficits.The main elements of past research have focused on how people best deal with the risks.In my view, there are basically three importantreasons for looking at the issue from a differ-ent perspective. First, we need to analysewhich people are most at risk and in most urgent need of help – not just when a naturalcatastrophe or another dreadful event strikesbut at any time. Secondly, human organisa-tions are extremely complex. To understandthem, we need a multidisciplinary as opposedto a monodisciplinary approach. Thirdly, re-search into social vulnerability should not bedevoted solely to structural measures for mini-mising risks such as building stronger dams.

What distinguishes research into social vulner-ability from other disciplines?

It puts people at the centre. The major chal-lenges of the 21st century – lack of clean water,inadequate healthcare, climate change andmore severe natural hazards – require swiftaction. The United Nations’ Millennium Devel-opment Goals include reinforcing society’sresilience and improving living conditions forparticularly vulnerable groups. In terms ofthese goals, people, their social systems andtheir environment are inseparably linked sothat they can live a life free of fear, risk andwant.

Your work for the Foundation Chair involvescoordinating a network of outstanding scientists. What challenges does that pose?

As with all forms of multidisciplinary cooper-ation, and particularly with a team of profes-sors, there are challenges as well as advan-tages, starting with the quest for appropriatework definitions and methods. We do ourutmost to find solutions that can be applied incomplex situations and also used in anothercontext. The work offers excellent opportun-ities for being innovative – scientifically and inpractical terms.

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Dr. Koko Warner

An economist whocomes from the USA and assists the Chair-holders at the UNU-EHSin Bonn in a coordinatingrole. After several yearsof research, she will pass on her knowledgeto young academics.

Research

Where do you see yourself in five years’ time?

Social vulnerability has many facets. Theyinclude gender justice, education, finance andsocial hierarchies as well as the different cul-tural values, risk perceptions, and resistancelevels of the various societies. It will probablytake at least five years to deal with the issue in its full complexity. The Chair gives me aunique opportunity to work with scientists ofinternational repute. I look forward to beingable to pass on what I have learnt here aboutsocial vulnerability and research approachesin that area.

What stage will vulnerability research then be at?

In five years’ time we should have a fairly ac-curate “world map” of social vulnerability. It will show the hotspots, the main causes, andthe widely accepted solutions for reducingsocial vulnerability. If, in addition, we manageto achieve a common understanding of thisissue, that will have been an enormous stepforward.

In retrospect, what experience did you findmost moving at the 2006 Summer Academy?

There were many special moments. I remem-ber, for instance, participants in voluntaryworking groups continuing the discussionsuntil well into the night, and another occasionwhere a Chinese student noted that her opin-ion was taken seriously in spite of her youth. It was particularly pleasing that participantsstayed in touch after the Summer Academyand offered one another encouragement intheir research. The Summer Academy alsogave many experienced post-doctoralresearchers added stimulus for their work –they considered it a privilege to have beeninvolved.

What is the exact nature of the work with the students?

Often the scientists, whether PhDs or gradu-ates, are performing pioneering research.They are familiar with the latest social vulner-ability literature and have experience ofcurrent activities in this field. Working withthese young scientists helps to focus ourresearch. In turn, the benefit for them is thatwe open up wider horizons and put things inan overall context. We also help doctoralcandidates to establish contacts with otherinstitutions and scientists – something thatmay not have been possible to the same extentin their own faculty. In this way, the SummerAcademy and Foundation Chair on SocialVulnerability constitute a platform for a multi-disciplinary, scientific approach to the issue.

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TopClimatologist Dr. TomDowning in discussionwith Prof. Hans-GeorgBohle, an expert onpoverty issues. Thesharing of expertiseacross disciplinary boundaries opens up new perspectives.

BottomProf. Janos Bogardi,Director of the UnitedNations University in Bonn, discusses theconcept behind the Chair. Four outstanding scientists are engaged in joint research over a period of four years,each in turn occupyingthe Chair on Social Vulnerability.


Vulnerable but not defenceless2006 Summer Academy

Research 8

Some 25 young scientists and high-rankingexperts who attended a week-long SummerAcademy at Hohenkammer near Munichdiscussed the social vulnerability problemsencountered at times of natural catastrophe.The Academy, founded by the United NationsUniversity (UNU) and the Munich Re Founda-tion in 2006, will continue to promote researchin this field.

Whether they live in traditional rural structuresor in megacities, people are becoming moresocially vulnerable to the forces of nature andincreasing scarcity of resources. And becausethe perception of risk varies widely from regionto region, there is great need for research. Wecan avert the worst consequences of naturalcatastrophes and save lives only if we are ableto build up the resilience of social systems tocatastrophes and improve human security.

The importance of this issue has been all tootragically demonstrated in recent years. 2005went down in history as the most catastrophicyear on record after hurricanes such asKatrina, Rita, and Wilma had cut a swathe ofdevastation across the USA and the Caribbeanand severe earthquakes had left tens of thousands dead. Huge areas were laid wasteby tsunamis in 2004 and 2006. Since an under-standing of the interaction between man,resources and natural hazards is crucial to our future, the United Nations University inBonn and the Munich Re Foundation have set themselves the task of encouraging andexpanding global research in this field.

With ten professors and 25 young scientists,the first ever Summer Academy on this topicconstituted an interdisciplinary platform. It took place between 23 and 29 July 2006 at Schloss Hohenkammer near Munich, and offered PhD students from Brazil, China, Ecuador, Germany, India, Mexico and the USAan ideal forum for exchanging knowledge and for networking.

The event focused on water and was entitled“Water-related social vulnerabilities and resilience-building”. Participants addressedissues such as safeguarding water supply andsewerage facilities, flood and drought, povertyand the lack of risk perception. Particularemphasis was laid on interdisciplinary analy-sis and the quest for appropriate ways ofimprovement. Prof. Janos Bogardi, Director of the Institute for Environment and HumanSecurity of the United Nations University,

noted that sustainable disaster mitigationmeasures would work only if they took intoaccount the sensitive structures found within a social system, with its complex inter-relationships and reaction mechanisms.

Prof. Úrsula Oswald Spring of the NationalUniversity of Mexico, holder of what iscurrently the only Chair on Human Security,stressed that, despite in some cases majorcultural differences, societies encountered thesame basic problems time and again. “Women,the elderly and children are the most commonvictims of catastrophe. In many countries theysurvive only because the women have formedsolidarity networks. Politicians also need toinvest in this area if we are to reduce the vulner-ability of families, villages and entire regions.”

The initiators see the Summer Academy onsocial vulnerability as a major driving forcebehind the increasingly vital field of vulner-ability research. However, the Academy had to be more than an intellectual exercise. It should help identify solutions for people inrisk situations and stimulate politicians to takeaccount of the issues in their decisions.

TopProf. Bogardi explainsthe objectives of the United Nations Universities.

BottomYoung scientists fromfour continents describethe experiences theyhave gained from localprojects.

Sustainable disaster mitigation has to take into account the sensitive structures of the social system.

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Policy implications

InvolvementInvolve the communities considered in vul-nerability studies. Participatory research andaction are critical to sustained vulnerability-reducing activities. Involvement of key stake-holders means helping science serve localvulnerability-reduction priorities.

EmpowermentStrengthen the ability of people to help them-selves – increase sustainability by giving thepeople affected the tools they need to helpthemselves, and shape their own resilience-building approaches.

PartnershipsCreate partnerships that allow stakeholdersfrom international, national, and local levels topool their strengths in reducing vulnerability:international (capacity, resources and vision),national (legal frameworks and resource channelling), local (understanding of complexissues and contact with stakeholders).

Ownership

Finally, research into, awareness of, and pol-icies reducing social vulnerability will fail ifthey do not involve the people who experiencesocial vulnerability. Individual and local trustand ownership of vulnerability-reducingefforts are the most important research andpolicy components. Living conditions willimprove in a sustainable manner only whenthe most important stakeholders – the vul-nerable themselves – embrace the idea ofvulnerability reduction and own the tools thathelp to build more resilient communities.

A number of workshops at the 2006 SummerAcademy addressed key social vulnerabilityissues. The ten pillars set out the items on theresearch and action agenda and define whatthe vulnerability research priorities should be.

Science

A common understanding of vulnerabilityResearch requires clear definitions and asound theoretical foundation and consider-ation of the spatial, temporal, and socio-economic context. Significant research gapsexist today.

Usable science Conducting social vulnerability researchreaches beyond academia and affects howpractitioners and policy-makers work withvulnerable populations. Social vulnerabilityresearch can be strengthened to move beyonddescription to more powerful analysis withusable, practical, and significant applicationpossibilities.

Measuring and analysing vulnerabilityThe tools for measuring social vulnerabilitycan be further sharpened. Solid qualitative andquantitative methods are needed to facilitatedecision-making and action related to socialvulnerability reduction.

Public awareness

ComplexitySocial vulnerability is a mosaic of interactingsystems (environment, social, and economichazards). Yet complex issues must be pre-sented coherently to maximise public under-standing.

EducationThe public needs straightforward information,and opportunities to learn about the roots ofand possible solutions to social vulnerability.Practical tools and knowledge can positivelyshape vulnerability-reducing behaviours andcommunity action.

MediaThe media provide a bridge between scienceand society, and signal the significance of social vulnerability to policy-makers. Themedia can play a significant role in raisingawareness of the distribution and causes ofsocial vulnerability by telling the stories ofvulnerable people.

Ten pillars of social vulnerability


Networking

Heatwaves and droughts will become moresevere as a result of climate change. The photo-graph shows women gathered at a small well at Tajae in Niger. Innovative insurance solutionscan help to relieve suffering, but only if wenetwork our knowledge about people’s needsand the way they think.

12Droughts, unlike earthquakes, are not some-thing that catch us completely unawares.Nevertheless, because they last for such a longtime, they are among the most destructivenatural catastrophes, laying waste to entireregions. Year after year, millions are affectedby droughts, a scourge which destroys the will to live even when it does not destroy lives.

The African continent is particularly prone todroughts. In Ethiopia alone, they caused some600,000 deaths in the 1970s and 1980s, withseven million people being subjected to exten-sive periods of drought. Sudan, Malawi, Chadand Mozambique also struggle with extremelyarid conditions. Currently, countries in theHorn of Africa are worst affected by watershortages, and the irony of it is that Ethiopiaand Eritrea also have to face widespreadfloods. The paradox of having either too muchor too little water is found elsewhere in Africaas well. United Nations scientists believe that climate change will further aggravate such extremes and that the number of peopleaffected on the world’s poorest continentalone could soon exceed the 200 million mark.

The UN has launched the ClimDev Africaproject as a response to the problem of drought over the long term. Initially, theobjective of the project is to collate andprocess data on weather and climate. Fundspledged by the United Kingdom will be used to improve risk management in a total of eight countries. The programme will be later extended to cover approximately one half ofthe African continent.

Drought and the poverty trapUntil the ClimDev Africa project takes effect,the UN and donor nations will be further calledupon to provide famine relief in drought-stricken regions. The FAO (Food and Agricul-ture Organization) and WFP (World FoodProgramme) have had a regional presence forseveral decades, supplying food to some 90million people each year. The WFP supportsaround 80 of the poorest countries. But for many, help comes too late. If crops aredamaged, people are often forced to selleverything they have in order to survive untilfinancial help arrives. They are caught in a poverty trap from which they can no longerescape by their own efforts.

For precisely this reason, it would be of benefitto develop and implement practicable insur-ance solutions for dealing with crop losses. Insome industrialised countries, it has long beencustomary to insure against exceptional orextreme weather conditions. This enables USpower suppliers, for instance, to make goodany losses incurred if the winter is unseason-ably mild. Similarly, ice manufacturers cantake out insurance to cover any falls in revenuethey may sustain in a cool summer. Thomas Loster

Together we can beat the drought trap

Networking

The world’s first humanitarian insurance Thankfully, there are now plans to removethese obstacles. The proposals range fromindividual microinsurance schemes to meso-scale coverages designed to improve livingconditions for several million people over a sizeable area. (See diagram, page 15.)

The first concrete moves in this direction weremade in Ethiopia in 2005 when the WFP andother donors issued a policy to insure peopleagainst extreme droughts. In essence, if 26weather stations record insufficient rainfallduring the period March to October, 17 millionfarmers receive compensation.

Even where multi-year covers are involved, the success of innovative schemes of this kindstill hangs by a thread where Africa is con-cerned. If rainfall is below the trigger threshold for a period of several years, it is difficult forthe insurer to recover loss payments via thepremiums. If, on the other hand, conditions are clearly arid but rainfall does not fall belowthe trigger threshold, no compensation will be paid – perhaps even for several years. Inthat case, people will not understand why theyhave to pay premiums when they receivenothing in return.

Number of peopleaffected by droughtworldwide in the period1970–2006

Industrialised countrieslike Spain, Belgium andthe USA also suffer fromfrequent droughts. Theydo not necessarily have tocause famine disasters inpoorer countries. Theworst of these occurred inthe mid-70s and mid-80sin the Sahel zone. Eachclaimed several thousandlives.

Number of people

0

1–1,000,000

1,000,001–10,000,000

> 10,000,000

SourceCRED, Brussels, 2006

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Weather derivatives or index products wouldalso be suitable for the developing countries in the drought corridors, and this would openup a large market to the insurance industry,offering huge potential. The mechanics are asfollows: compensation is paid if there is insuf-ficient rainfall in crucial growth periods. Thisallows people to purchase food ahead of afailed harvest, a major step in overcomingpoverty. If this then leads to the establishmentof a viable insurance market, the result will bea system which is more reliable and cheaper to administer than cumbersome internationalaid programmes.

Obstacle to developmentIn many countries in South America, Asia and Africa, index and derivative products ofthis kind fail for want of suitable or reliabledata. Moreover, reactions tend to be negative.It is particularly difficult to win trust and understanding for insurance schemes in devel-oping countries as, by and large, they have not previously had access to financial services.And it is very hard to explain that premiumpayments are not savings.

Thomas Loster

For the past 20 years, the Chairman of theMunich Re Foundationhas been involved in thefield of climate changeimpacts. The foundationis able to draw on thisexperience in its endeav-ours to find solutions to help drought-strickencountries.

14This example holds the key to an acceptablesolution. It takes a relationship built up overmany years and a sufficiently broad geo-graphical distribution to achieve a spatial ortemporal risk equilibrium. Success basicallydepends on the product design and on theestablishment of long-term, continuous part-nerships.

What makes a successful product?

Simple forms of coverThe ancient Egyptians had an agricultural taxwhich was linked to the depth of the River Nileat Elephantine Island. The deeper the water,the better the harvest and the higher the taximposed. Although such a simple solution is not appropriate for drought insurance, com-plex formulae with triggers that only expertscan understand tend to be counter-productive,especially when disputes arise. If the situationis not clear-cut the insured tends to suspectfoul play.

Allowing for lossesThe insured think that they are being exploitedif the meteorological trigger is set so high that seemingly no claims are paid. Arid years,when there have clearly been crop losses, are a particularly thorny issue. The structureshould make some provision for payments in less critical situations. Although this in-creases the premiums, it is essential in order to persuade people to accept the scheme.

Multi-year termsRisk partnerships developed over a period of years and based on trust are fundamental to risk-sharing, whereas insurance that reliesonly on short-term gains does not work. A stable partnership is far better than constantwrangling over premiums.

Geographical distributionThe wider the geographical distribution of an insurance product, the easier it is to bearthe load. Insurance is a system based on solidarity and works best with a broad geo-graphical spread.

Risk partnership as a success factor

Dialogue and understandingAs a rule, the different players – politicians,scientists, economists, the people concerned –do not “speak the same language”. To minim-ise the risk of misunderstandings, there has to be a clear consensus about the objectivesand time-frame, together with free-flowingdialogue. It is not essential to agree on everysingle point, and an element of dissent mayeven be beneficial provided all sights arefirmly fixed on the common goal. The partiesinvolved will not give their full support unlessthey can see the benefits of cooperation. Theimportance of ensuring continuity of person-nel is often underestimated in this respect.

Specific agreementsThe partners have to agree on coherent strategies, forge realistic plans, consistentlymeasure the results and involve as many ofthe decision-makers as possible from theoutset. Moreover, the higher the entry barriersand objectives, the longer it takes for projectsto get under way and the more crucial the roles of motivation and mutual encourage-ment. Consequently, small projects often havea better chance of getting off the ground.Prospective partners should not overstretchtheir resources by embarking on majorprojects from the start.

External communicationFinally, it is important to share success storiesand make no secret of obstacles encounteredand lessons learnt. Failure to learn from ourmistakes means continuously reinventing thewheel. Projects involving market leaders tendto have a multiplier effect.

At a time when climate change requires many different kinds of adaptation, morethought has to be given to underwriting tools.By a judicious integration of preventivemeasures, they provide more than just finan-cial equilibrium. In addition, risk transfer canbe a way to ease the suffering and improve the lot of millions of drought victims.

The foundation will continue to encouragenetworking among experts at all levels in the future. The way to escape the drought trap is for all those involved to seek sustainable solutions.

Networking

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MacroCatastrophe bonds, pools

MesoDerivatives, index insurance

MicroMicroinsuranceHealth, life, property, crops, livestock

InsuredIndividual

GeographyHome

Sum insuredUS$ 50–5,000

InsuredGroupUp to several hundred

GeographyTown, local community

Sum insuredUS$ 50–5,000

InsuredLarger communityThousands to millions

GeographyRegion

Sum insuredUS$ 200,000 to severalmillion

InsuredNation/GovernmentHundreds of thousandsto several million

GeographyCountry

Sum insuredUS$ 100m to several billion

Insurance products for people in developingcountriesScale, products, beneficiaries

Innovative insurance solutions can be tailoredto individuals or largegroups. The products andmechanics vary widely. If developed, they have the potential to help manymillions of people.

Munich Re Foundation,2006

Creative solutions to fight povertySecond International Microinsurance Conference

Microinsurance Conference in 2005. The con-ferences are coming to be recognised as aninternational platform for sharing opinions.

Dirk Reinhard, Vice-Chairman of the Munich ReFoundation and organiser of the event, stressed how important innovative financialconcepts were to developing countries. “Theawarding of the Nobel Prize to MuhammadYunus and his Grameen Bank has helped to raise global awareness of the importance ofthe microfinance sector.” Insurance was a vitalcomplement to loans, savings accounts andother financial services, mitigating risks andcrises in low-income households. “It all beganwith small loans granted to women to enablethem to expand their businesses. We now real-ise that financial services have a protective aswell as a productive function. Specially de-signed insurance products are vitally importantto many low earners,” Mr. Reinhard stated.

This is backed by the figures. According to theILO, only 20% of the world’s population hasaccess to adequate social insurance provisionsuch as healthcare and pensions. Over halfhave no cover whatsoever. The African con-tinent comes off very badly in global terms,fewer than 7% of the population having anyinsurance cover at all according to a survey byFinMark’s FinScope Institute. Insurers have to find creative solutions that cater for demandfrom the non-traditional markets.

Craig Churchill, an ILO microinsurance expertand Chairman of the CGAP Working Group on Microinsurance, argued that the supply gapcould be bridged by microsinsurance. “Asthese countries have limited resources, weneed an additional approach that uses govern-ment incentives to encourage greater privatesector involvement in the interests of thecommunity.”

Microinsurance is playing an increasinglyimportant role in the international fight against poverty. The second MicroinsuranceConference, held in Cape Town from 21–23November 2006, considered how people withlow incomes could gain access to insurance, particularly in Africa.

The number of microinsurance schemes and insureds doubled every year throughoutthe past decade according to a report issuedby the International Labour Organization.However, in the world’s 100 poorest countries,only 80 million people, 3% of the poor, haveaccess to insurance.

150 experts from 30 countries, including representatives of 80 international govern-mental and non-governmental organisations,aid agencies and the insurance industry, metfor intensive discussions under the motto “Making insurance work for Africa”. The annualconference was organised by the Munich ReFoundation and the Consultative Group to Assist the Poor (CGAP) Working Group onMicroinsurance in collaboration with theFinMark Trust, a South African-based inde-pendent organisation committed to creatingviable financial markets in developing coun-tries. Half of the participants represented in-surance and reinsurance companies, includingOld Mutual, Santam, Hollard, AIG, Munich Reand Zurich Financial Services – a sign of thegrowing interest taken by established marketplayers in under-provided regions. The confer-ence was attended by some 150 delegates inall, considerably more than at the inaugural

16

TopDirk Reinhard, Vice-Chairman of the Munich Re Foundationand organiser of theevent, welcomed morethan 150 experts from 30 countries to the con-ference.

BottomDelegates from 80 inter-national organisationsmet in the plenary sessions and numerousworkshops. Topicsranged from extendingthe scope of health insurance in Africa to therole of the insuranceindustry and the neces-sary legal framework.

www.microinsuranceconference2006.org

Networking

Economist Muhammad Yunus mastermindeda breakthrough for the microcredit concept,and was awarded the Nobel Peace Prize 2006in recognition of his achievements.

No money, no security and not even a bankaccount. Muhammad Yunus is there to helpwhen conventional banks say “no”. He grantsstart-up microloans in developing countries.These are designed to help poor people to place their lives on a more secure footing.Yunus and his creation, the Grameen Bank,were awarded the Nobel Peace Prize 2006 in recognition of their services to the poorestof the poor.

The concept behind microinsurance is verysimilar to that of microcredits. However, whilstmicrocredits cater primarily for start-ups,microinsurance provides cover for risks suchas illness-related crises, safeguarding existingfinancial situations in the long term.

Yunus was able to dispel initial doubts and isnow highly successful. Grameen Bank hassome 6.8 million borrowers, 97% of whom arewomen. It offers its services at more than73,000 locations, and covers virtually 90% of the villages in Bangladesh. The loans aregranted for productive purposes such askeeping a chicken farm or opening a tea stand.

Yunus does not require security and acceptsthat the loans are too small to be processed byconventional banks. He does not have acumbersome administrative system. Instead,he relies on a small army of employees,sending them out to the villages to collect the capital and interest repayments fromborrowers. This minimises the default rate.

The economics professor believes that we allpossess something of the entrepreneurialspirit and that people should not be denied theopportunity to provide for their families bysetting up a small business. The poor are ingeneral neither too passive nor too ignorant to earn money. It is the constant struggle tosurvive that stops people saving up the capitalthey need to start a business. Yunus’ ideashows that a little help can go a long way – a motto that is equally true of microinsurance.

Banker to the poorNobel Peace Prize 2006

Although there is no shortage of demand fromlow-income groups, a fully-functioning insur-ance market needs the right products and efficient distribution channels. The scale of thepotential involved is illustrated by SouthAfrica, where some 100,000 communal burialsocieties collect around US$ 1bn in premiums.These enable low earners to meet the oftensubstantial costs of family funerals. Given thenumber of people obliged to provide for un-expected expense in this way, it would seemthat the established insurance market fails tomeet demand.

Innovative schemes such as Uganda’s Microcare health insurance and West Africa’s communally organised Mutuelles Santé cooperatives show that the problems of themicroinsurance market can be solved. Majorobstacles include high distribution costs and a lack of understanding about the wayinsurance works.

Again, South Africa sets an example. Micro-insurance is at the heart of the burial societiesin all but name. In South Africa, unlike India,traditional insurance companies are the main driving force, rather than microfinanceorganisations. They have joined forces withthe country’s major retailers, such as Shoprite,Edcon, PEP Stores and Ellerines, to providemicroinsurance policies.

In conclusion, Dirk Reinhard told the confer-ence, “We are experiencing new growth withenormous opportunities. Far from being small and insignificant, microinsurance is thekey to social provision and the fight againstpoverty.” The conference participants wereparticularly interested in regulation issues, the legal framework being a major factor in the acceptability of microinsurance schemes. This issue will accordingly be on the agenda of the next conference, which will be held inMumbai in November 2007.

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Microinsurance is a vital complement to loans, savings accounts and other financial services, mitigating risks and crises in low-income households.


First microinsurance compendium25 case studies from four continents

“Protecting the poor – A microinsurancecompendium”, jointly published by theMunich Re Foundation and the InternationalLabour Organization (ILO), was the firstcomprehensive compendium on microinsur-ance. As an indispensable reference workbased on practical experience, it summarisesthe current state of knowledge, explains theproblems, and offers new solutions.

Microinsurance is still in its infancy. A 2006survey of the world’s 100 poorest countries byUS-based MicroInsurance Centre revealed, as mentioned above, that fewer than 80 millionpeople (3% of the most economically deprived)had access to insurance. To enable the idea togain ground, it is important that we analysethe existing systems, the problem areas andthe potential schemes. The compendium“Protecting the poor”, published in November2006 by the International Labour Organizationand the Munich Re Foundation, takes acomprehensive look at microinsurance withthis in mind.

The compendium was compiled by CraigChurchill of the ILO. He is the Chairman of theConsultative Group to Assist the Poor (CGAP)Working Group on Microinsurance, a consor-tium of international aid agencies specialisingin microfinance. The first comprehensive reference work on the subject in English waspublished under CGAP auspices. It presents a summary of the latest research by leadingscientists, actuaries, insurance and develop-ment experts working in the microinsurancefield. Numbering 650 pages in all, it takes adetailed look at all aspects of microinsuranceincluding product design, distribution,premium collection and governance.

Craig Churchill commented: “The relationshipwith the Munich Re Foundation has beenmutually beneficial.” Perhaps more valuablethan the foundation’s financial contribution is the indirect access to the knowledge of one of the world’s best know reinsurance com-panies. Mr. Churchill also noted: “Having theMunich Re Foundation associated with micro-insurance adds instant credibility to our effortsto popularise and improve microinsurance to protect the poor, and attracts more expertsfrom the mainstream insurance industry.”

The Microinsurance Compendium is theessence of a four-year research project in whichthe CGAP Working Group examined two dozencase studies based on 40 microinsurance schemes in different parts of the world, citingexamples – both good and bad. The study con-centrated on organisations with a minimum

18

Worldwide per capitadistribution of insurancepremiums

The world is made up of the insured and theuninsured. There is a thriving market formicrocredits andmicroinsurance in thedeveloping world.

Property insurancepremiums (non-lifeincluding health) perperson and per year

UninsuredUS$ 1–25

Basically insuredUS$ 26–50

Well insuredUS$ 51–100US$ 101–500US$ 501–1,000 > US$ 1,000

No data

SourceMunich Re, 2006

Networking

of three years’ experience in the field ofmicroinsurance and at least 3,000 insureds. It focused on Africa, Asia and Latin America,the microinsurers examined representing as many different business models as possible.

The 38 authors, who came from a wide rangeof backgrounds – most being members of theCGAP Working Group – summarised thefindings they had reached in the course of theresearch project. In all, nearly 100 people were involved in the case studies and book.Although the authors represented a variety ofdifferent opinions, the book gave a clearpicture of the current situation, and in particu-lar the challenges faced by low-income groupsand potential solutions. The compendiumshows that microinsurance fulfils an importantfunction and can even be profitable, providedthe circumstances are right and the manyobstacles overcome.

“Protecting the poor” is an indispensable reference work for insurance professionals,practitioners, politicians and anyone con-cerned that low-income groups should haveaccess to insurance, particularly in the developing world. It aims to help millions toovercome poverty by their own efforts.

The first section, “Principles and practices”,defines microinsurance, describes the risks to which low-income households are exposed,and explains the social protection role ofmicroinsurance.

The second section, “Microinsurance productsand services”, summarises experiences with a number of products and investigates theextent to which the product has to be tailoredto the specific needs of women and children.

The third section describes the different“microinsurance operations” in detail, andfeatures product design, distribution, premiumpayments and risk management. The sectionconcludes with a chapter on microinsuranceperformance indicators and benchmarking.

The fourth section, “Institutional options”,deals with the institutional aspects and high-lights the advantages and disadvantages ofthe various models.

“The role of other stakeholders”, the fifthsection, looks at the part played by the main stakeholders, such as donors, super-visory authorities, governments, insurers and reinsurers.

“Conclusions”, the sixth and final section,summarises the strategies needed to achieve a balance between the cover, the costs, and the premium. Finally, the book considers whatlies ahead for microinsurance.

In addition to its commitment to the compen-dium, the foundation continues its support ofthe annual International MicroinsuranceConferences. These conferences are recog-nised as an important platform for sharing experiences.

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Microinsurance fulfils an important function and can even be profitable, provided the circumstancesare right and the many obstacles overcome.

Individual chapters of the microinsurance compendium can be accessed free of charge on the following website:

www.microinsurancecompendium.org


TopCraig Churchill of the ILOthanks the authors – over30 in all – who contrib-uted articles to the book.

BottomWritten in English, the650-page work onmicroinsurance dealswith a variety ofproducts, services, andinstitutional issues and draws on practicalexperience.


Sensitisation

The effects of climate change are not always as immediately apparent as in Europe’ssnow-starved winter of 2006/7. If we want to contain the effects of anthropogenic climatechange, the message has to be brought hometo young people.

22“Natural catastrophes are cultural catas-trophes.” This well-known, apparently para-doxical, assertion by Kiel sociologist Lars Clausen illustrates on the one hand the effectsof extreme natural hazards, which end incatastrophe only if people, buildings or othervalue creations are unprepared when disasterstrikes. Catastrophes do not happen in thedesert or in polar regions.

On the other hand, Clausen is saying that man-kind and its culture are based on an increasingexploitation of resources. Mankind is exertinga growing, more lasting influence on naturalliving conditions and effectively sawing off the branch on which it sits. After all, to put it inhuman terms, nature does exact a tribute. It reacts to interference with its natural, gener-ally dynamic, equilibrium in accordance withits own laws, which it – unlike humans – can becounted on to apply.

New dimensions in climate changeThe pace of global warming is already greaterthan at any time in the last million years and is expected to gain still more momentum. Thisis a prime example of man’s intervention innature and of the resulting risks. It is a conse-quence of the intensive exploitation of fossilenergy sources and of large-scale deforest-ation, which have already drastically increasedthe concentration of greenhouse gases in theatmosphere and are expected to do so stillfurther in the foreseeable future. Although theeffects of other man-made environmentalchanges – such as decreasing biodiversity,over-fishing of the oceans, over-exploitation of water resources and the spoliation of land –are more immediately apparent and of farmore dramatic regional impact, global climatechange adds a completely new dimension,threatening each and every one of us. Whatmakes it so disturbing is that the earth hasgradually been getting warmer since the startof industrialisation some 200 years ago, butuntil recently this had gone virtually unnoticed.Even using long-term data, it is difficult to dis-tinguish global warming from natural climaticvariability.

Prof. Gerhard BerzAvoiding the uncontrollable –Controlling the unavoidable

We have reached a critical point in terms of thelong-term repercussions for developing countriesand future generations.

Sensitisation

Fortunately, one or two key witnesses make it increasingly difficult for even the most hard-ened sceptics to deny the existence of the linkbetween industrialisation and climate change.For example, the glaciers are gradually melt-ing in all but a few regions such as the innerAntarctic, where temperatures are too low for the ice to melt and instead there is moresnow. There are also visible signs of the effectsof changing climate conditions on flora andfauna. Habitats are being displaced, and thereare changes in migratory behaviour patternsand plant development.

More frequent and more intensive weathercatastrophes, directly related by nature to extreme atmospheric events, have alwaysbeen among the most telling indications ofglobal change. Once again, nature obeys itsown – and statistical – laws, responding withextremes when, for example, there are shifts in average temperature and precipitation. Inthe last third of the current century, we canexpect summers like that of 2003, a once-in-400-year phenomenon according to previousclimate data, to occur on average every otheryear. In other words, they will virtually becomethe norm in Europe. At the same time, we willexperience occasional summers that are hotterthan any before.

Insurance as an early-warning systemLike the hot summer of Central Europe in 2003,the hurricanes that lashed the Caribbean andthe USA in 2004 and 2005 may also be theshape of things to come. Clearly, the higher the sea temperatures, the longer the hurricaneseason, which gives rise to more cyclones,greater peak intensities, and changes in thepatterns of hurricane tracks, not only in the Atlantic but also in the other tropical andsubtropical oceans.

Insurers, and in particular international rein-surers, must by nature keep a “weather eye”on any changes in their risk environment toavoid being caught unawares, and even tosurvive. They have therefore become a kind ofearly-warning system for the effects of globalclimate change. Frequently accused of beingalarmist and of professional pessimism, theinsurance industry was the first economicsector to draw attention to the disconcertingrise in natural catastrophe losses. The industryhas also shown that the cause was not onlyhigher value concentrations and the increasingvulnerability of modern industrial societies.The rise was also due to a large extent toglobal climate change.

Economic and political cost-benefit con-siderations in matters of climate change areeven now based on the insurance industry’sloss statistics. At the same time, insurancecompanies and banks have realised that thepublic respects their commitment and thatthey are doing themselves a good service. Notwithout good reason has the former head ofthe United Nations Environment Programme,Klaus Töpfer, referred to the financial sector as being his main ally.

Raising awarenessClearly, it is not enough just for politicians andeconomists to take climate change seriously.Indeed, the problem cannot be tackled unlesseveryone is aware of the changes and poten-tial remedies. We must educate and motivateas early and on as broad a scale as possible.Kindergartens and schools have their part toplay – not easy at a time when lessons com-pete with computer games, television showsand other forms of entertainment, althoughthese can also be used as learning aids.

Whilst the consequences of natural catas-trophes are often tragic, they can provide anopportunity to reconsider causes and revisepreventive measures. Recent examples seemto indicate that we are likely to make progressonly if we follow this painful course. There isno time to be lost. There are growing indica-tions that the pace of climate change is accel-erating, with dire consequences. We have nowreached a crucial point in terms of the long-term repercussions for developing countriesand future generations. This is aptly describedby Hans-Joachim Schellnhuber, Director of the Potsdam Institute for Climate ImpactResearch: “It is now a matter of avoiding theuncontrollable and controlling the unavoid-able.” If we do not succeed, that really will be a catastrophe for human culture.

23


Prof. Gerhard Berz

Prof. Berz, a meteorolo-gist and geophysicist,was head of Munich Re’s Geo Risks Researchfrom 1974 to 2004, estab-lishing its reputation as a leading institutionwithin and outside theinsurance industry. Prof. Berz is involved in a number of national and international as-sociations.

Climate protection feverSchools competition

www.unendliche-energie.de.

“Young people with boundless energy –Protect the climate!” was the theme of a nationwide campaign aimed at young peoplein 26,000 schools. The Munich Re Foundationsponsored a special prize.

The project, designed to boost awareness of climate change in schools, was the brain-child of the German Federal EnvironmentMinistry (BMU). Pupils were given worksheetsand handouts on renewable energies, energyefficiency, the environment, mobility andclimate protection together with an energyquiz to use as support material for the lessons.They also had the option of seeking advice or financial help from project partners such as regional associations, firms and initiativegroups. Some 7,000 pupils submitted pro-posals.

The Berlin Zeitbild Verlag publishing house,which has extensive experience in the educa-tion field, organised the competition, part-nered by the Munich Re Foundation whosemission, like that of the competition itself, is todevise solutions, put knowledge into practiceand take corresponding action.

Enthusiasm and imagination were the order ofthe day. The pupils had 12 months to explorethe issue of renewable energies and to comeup with ideas for conserving fossil fuels. Theresults were convincing:

The award ceremony was held on 26 April2006. It was attended by 150 pupils andteachers from all over Germany. The toptwelve teams, representing eight federalstates, presented their climate protectionprojects. State Secretary for the Environment,Matthias Machnig, presented cash prizes totalling €15,000.

First prize went to the pupils of Hermann TastSchool in Husum in recognition of theircommendable efforts and original ideas. Theyconstructed Germany’s first-ever (scaled-down) offshore wind farm on mudflats. Theyoung climate change activists were selectedby the jury on account of their ingenious ideafor using miniature wind turbines to generatehydrogen. Prizes also went to a group fromBerger Feld Comprehensive School in Gelsen-kirchen for their excellent scheme designed to teach fellow pupils about climate protection,as well as to the Ferdinandshof School inMecklenburg-West Pomerania. Pupils of thisschool for children with learning disabilitiesturned the spotlight on the value of nature and nature protection in a short musicalproduction called “The Generation Tree”.

The Munich Re Foundation presented a specialprize for the best individual effort: a solar-charged iPOD. The winner, 16-year-old SörenKlabunde of Sollstedt Secondary School,produced a mirror distillation device for purify-ing drinking water. The self-powered conden-sation device can be used to supply clean drinking water in regions with abundant sun-shine. It has the potential to improve livingconditions for people in much of the develop-ing world.

The Munich Re Foundation will also be in-volved in the 2007 nationwide schools com-petition in recognition of the vital need toinform young people about the consequencesof climate change and get them to considerwhat can be done about it.

24

The proud winners fromBerger Feld Comprehen-sive School in Gelsen-kirchen. They won thejury’s vote for their entry“A lesson in climateprotection”.

Sensitisation

Lessons from spaceClimate expedition project

“Climate expedition”, a project conceived by German environmental and developmentorganisation Germanwatch, brings dailyupdated satellite views of earth to the class-room. The Munich Re Foundation supportsthis education project, which is designed toincrease young people’s awareness of climatechange.

Germanwatch embarked on its climate exped-ition in August 2004. Using modern tech-nology and satellite imagery, environmentaleducationalists explain how climate works, thechanges it has undergone in recent decadesand the impact of climate change, particularlyin developing countries. The project is an idealway of highlighting key aspects of sustainabledevelopment.

Holger Voigt, one of the environmental edu-cationalists responsible for the project, ex-plained: “We want to encourage pupils to thinkabout the environment and to actually dosomething. Instead of standing at the front andlecturing, the idea is to use satellite imagesand technology to stimulate their interest”. Mr. Voigt, a biologist, knows from experiencethat the cutting-edge appeal of live imagesmakes them very popular with pupils andteachers.

A project day normally comprises three double teaching periods, during which pupilscan look down on the eye of a hurricane from36,000 km above the earth, see the effects of floods in Ethiopia or take a look at the grad-ually receding Lake Chad.

They also find out about the Kyoto Protocol’sclimate policy proposals and what they them-selves can do to protect the climate, forinstance by consuming less energy. German-watch also provides materials which teacherscan use for an in-depth exploration of theissues covered by the project.

The teaching module was originally intro-duced in North Rhine-Westphalia but increas-ingly schools in other German states haveasked to be included. The Munich Re Founda-tion is supporting the project to help German-watch meet this growing demand. Climatechange tends to unleash forces of nature suchas hurricanes, droughts and floods, whichincrease sea levels and threaten countlesslives. By raising people’s awareness of therisks, the climate expedition concept is in linewith our motto “From Knowledge to Action”.The foundation’s principle target group for theproject is young people. A wealth of informa-tion has been published on the subject ofclimate change but it is felt that the virtuallyreal-time images from space will have particu-lar appeal for the young.

The United Nations has acknowledged the pro-ject’s importance by granting it official statusunder its World Decade of Education for Sus-tainable Development. Spanning the years2005–2014, the World Decade was launched topromote social, economically viable and eco-logically sustainable development.

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Environment education-alist Holger Voigt usessatellite pictures takenfrom 36,000 km abovethe earth to show pupilsthe consequences of therise in sea levels.

Forewarned is forearmedDialogue forums on the risks of living in Munich

Children in Munich – What risks arethey really exposed to?21 September 2006

Children are not small adults. For thatreason, it is all the more important toinvestigate the specific risks to whichthey are exposed. We are hampered inthis because media reporting of envir-onmental risks and our subjectiveperception of them do not always re-flect the real dangers.

What are the main perils?The experts agreed that passivesmoking in the home and accidentswere the two main risk factors. Dr.Hermann Fromme of the BavarianHealth and Food Safety Authoritystated that two-thirds of 6 to13-year-olds were regularly exposed to cigarette smoke and that one in fivepregnant women smoked. The consequences ranged from middle-ear infections and asthma to cancer.“It is high time Germany did some-thing,” he urged.

Dr. Stephan Böse-O’Reilly, a paediatri-cian at the German Network on Children’s Health and Environment,identified traffic accidents, which involved significant costs, as one ofthe main risks, in addition to passivesmoking. In all, €300–600m could besaved annually through the preven-tion of traffic accidents and €250m byaction against passive smoking.

Prof. Peter Höppe, Head of MunichRe’s Geo Risks Research unit, ex-plained that people tended to over-estimate risks over which the individ-ual had little control. For example,parents were unduly worried aboutthe threat posed by nuclear radiationand mobile phone masts but paid toolittle attention to the dangers of lack of exercise and domestic accidents.

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Encouraged by the success of the inauguralyear dialogue forums, the Munich Re Founda-tion, supported this time by the GSF – NationalResearch Center for Environment and Health,organised a further series in autumn 2006. Thefive evening forums gave Munich residents anopportunity to voice their concerns before apanel of experts. What risks are our childrenreally exposed to? Is fine dust making us ill?Are we prepared for a pandemic? How do themedia influence our perception of risks?

The series was attended by people who live inand around Munich, together with representa-tives of the environmental and health author-ities, political and business life. It was organ-ised by the Munich Re Foundation as part of its endeavour to identify, classify and preventrisks and to propose remedial action. We alsosee the dialogue forums as a way to promoteawareness of risks close to home and showthat, as a Munich-based foundation, we havethe city’s interests very much at heart. Theimportance of this concern became moreevident with each dialogue forum, as there isoften a substantial gap between people’spersonal perception of danger and actual riskpotential.

Sensitisation

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Which children are particularly exposed? In the case of passive smoking, it hasbeen proven that children from social-ly deprived backgrounds are more atrisk. Prof. Monika Jungbauer-Gans ofthe Institute of Social Sciences at theUniversity of Kiel also establishedfrom the results of school-entry med-ical examinations in Munich that chil-dren from low-income householdswere more inclined to be overweightand suffer from lack of exercise. Theposition was reversed in the case of vaccinations. “In Munich, the moreeducated the parents, the less likelythey are to have their children vaccin-ated and the more likely to turn fromorthodox to alternative forms of medi-cine.”

How dangerous are vaccinations?Opinions about the pros and cons ofvaccinations were very much dividedboth in the audience and among theexperts, showing that the issue of children and the risks they face shouldnot be dropped from the sociopoliticalagenda. Thomas Loster, Chairman ofthe Munich Re Foundation, concluded:“Unfortunately, people still fail toappreciate many of the risks faced by children. But we can only takeappropriate action if we are aware ofthe real risks.”

Fine dust in Munich – Is it making us ill?5 October 2006

Munich has one of the highest trafficvolumes of any German city, and EU limits on fine dust particles areoften exceeded in just the first fewmonths of the year. The issue provokesdebate – and not just between the environmentalists and the authorities. The second dialogue forum proved particularly topical in the light of anannouncement by the World HealthOrganization (WHO). Within hours of a WHO press release on new guide-lines for air pollutants such as finedust particles, ozone and sulphurdioxide, some 80 people had gatheredto hear scientists, politicians and en-vironmentalists discuss the issue offine dust in Munich.

Which particles constitute the mainhealth risk?Of particulate matter with a diameterof less than 10 micrometres (PM10),particles which have a diameter of less than 2.5 micrometres (PM2.5) areconsidered especially harmful. Currentlevels of PM2.5 are estimated to reduce statistical life expectancy inEurope by approximately nine months.

How strict are EU regulations compared with other international standards?Air quality standards proposed by theEU Parliament in September 2006 now have to be seen in the context ofnew WHO guidelines – the first toapply worldwide. Not only do they falla long way short of WHO standardsbut in addition the EU proposes thatcities be allowed to exceed the limit on a maximum of 55 days as opposedto the 35 imposed by the WHO.

Prof. H.-Erich Wichmann, Director ofthe GSF’s Institute of Epidemiology,stressed that “fine dust is so hazard-ous that every reduction counts!” He therefore called for strict PM2.5thresholds together with short-termand long-term PM10 exposure limits.Professor Wichmann rejected themore lenient line on short-term limitsadvocated by the EU Parliament. Heargued that we should reduce emis-sions by fitting diesel particle filters to cars and that traffic volumes shouldbe decreased in densely populatedareas. “In Germany, fine dust causesthree times more deaths than trafficaccidents. We know enough to takeimmediate action.”

Gerd Rosenkranz of the DeutscheUmwelthilfe environmental group dis-missed the EU’s latest proposals asnot so much an attack on fine dust asan attack on threshold values. He tooadvocated fitting diesel particle filtersto older vehicles and introducingcongestion charges. “We ran acampaign to alert the car industry tothe problem but their lobby is toopowerful,” he conceded.

Member of the European ParliamentHolger Krahmer defended the EU’sproposals and higher short-termvalues. Isolated measures had littleeffect. We needed to strike a socialbalance between the measures, andstop pitting industry against man and environment.

Joachim Lorenz, Head of Munich’sDepartment of Health and Environ-ment, described the EU’s proposals asill-advised. “The only way to achieveour objective is to keep up the pres-sure”, he said, urging the introductionof PM2.5 limits in the EU. “We areaware of the problem but dealing withit is another matter.” The city had tofind intelligent solutions and considerall the options, such as banning heavygoods vehicles from certain areas.

Fine dust is not just a local issueThe differences between the expertswere reflected in the views of the audience. Is Munich tackling its trafficproblems at the expense of surround-ing areas? How much fine dust is dueto ammonia produced in farming? Thequestions showed that the fine dustissue did not begin and end at the cityboundary. The debate on air pollu-tants will become even more intensewhen sulphur dioxide limits are intro-duced in 2010. Those present agreedthat pollution was an acute environ-mental problem both in Munich andbeyond its boundaries.

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28Allergies and respiratory diseases in town and country – On the increase26 October 2006

The number of people who sufferfrom allergies in Germany is thoughtto number between 24 and 32 million.Some 3,000 die each year from theeffects of asthma alone. The audienceat the third dialogue forum includedmany allergy sufferers and the panelof eminent specialists faced a barrageof questions.

What is the trend? Allergies and asthma are on the in-crease according to surveys referredto by Prof. H.-Erich Wichmann of theGSF. However, the results vary con-siderably: “Allergies are less commonin rural than in urban areas.” Thelarger the community, the higher thefrequency.

The reasons for this were not yet clear.Moreover, there had been a steadyincrease in the relatively low incidenceof allergic diseases in the easternfederal states and the level wouldsoon be the same as in the west.

What about treatment methods? “Allergic diseases are one of modernsociety’s major health challenges,”according to Prof. Johannes Ring,Director of the Clinic and Polyclinic forDermatology and Allergy Biedersteinat Munich’s Technical University.Experience had shown him that “treat-ment should be seen in terms of aholistic allergy management con-cept”. Patients had to be treated forthe acute symptoms in the firstinstance but, in the long term, treat-ment had to provide complete relief.There were no magic pills or diets. We had to find the cure that suited theparticular case.

What are the main research areas? All the experts expressed concernabout the increase in allergic diseasesin recent decades. In Professor Wich-mann’s words: “Scientists face thechallenge of gaining a better under-standing of the causes of allergicdiseases by finding out why, for in-stance, given equal environmentalconditions, some people are affectedwhile others are not.”

What if an epidemic strikes – Is Munich prepared?9 November 2006

The fourth dialogue forum could alsohave been called “Thinking the un-thinkable”. The experts discussed notonly the implications of an epidemicbut also the impact that a pandemicwould have on Munich. The mainconcern was how to prevent a repeti-tion of what happened in 1918 whenSpanish Flu claimed millions ofvictims.

How big are the risks?Prof. Günther Kerscher, Head of theHealth Department at the BavarianState Ministry of the Environment,Public Health and ConsumerProtection: “It is not a case of whetherbut when the next pandemic willstrike. All countries should be pre-pared. There are international guide-lines in the form of the WHO globalinfluenza preparedness plan.”

Could bird flu trigger a pandemic?Dr. Petra Graf of Munich’s Departmentof Health and Environment was re-assuring: “Bird flu is confined to theanimal world and, given its currentmolecular structure, the bird flu virus(H5N1) could not trigger a pandemic.”However, H5N1 was the candidatemost likely to trigger a pandemicvirus. If the genome mutated, it mightbe able to pass from one person toanother. In August 2006, the State ofBavaria accordingly approved a pro-gramme comprising surveillance,vaccination and the provision of anti-viral drugs. Dr. Graf told the audience:“Apart from that, each individual canhelp minimise the risk of infection.”This involved a few simple buteffective hygiene measures such asfrequent hand-washing, not shakinghands with people, and staying awayfrom crowds.

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demic

What plans are there for patient carein the event of a pandemic?Dr. Wolfgang Guggemos (SeniorPhysician in the Department ofInfectious Diseases and Tropical Medi-cine at the General Hospital MunichSchwabing) advised: “We have nopatent recipes. But we are well pre-pared thanks to our extensive experi-ence in the treatment of infectiousdiseases.” Antiviral drugs would beused in the first stage of a pandemic. It would take at least three months toproduce a vaccine once the virus had been identified. The second-gen-eration vaccines currently being de-veloped were likely to have a broaderspectrum of activity.

The floor was then opened for ques-tions. Opinions were very much div-ided, and the discussion occasionallybecame heated, showing the currentfear and uncertainty about bird flu.Some of the statements made by theexperts on the role of the politiciansand media also caused comment,which conveniently brings us to thesubject of the next dialogue forum.

29


Pollutant of the month and the self-styled experts – The role of politiciansand media in the risk debate.28 November 2006

The fifth and last debate in the 2006series of dialogue forums focused noton the risks themselves but on howwe approach them. The discussionwas chaired by Patrick Illinger, ScienceEditor of the Süddeutsche Zeitung,who commented that, since humanswere not rational beings, the rationalebehind that approach was not alwaysimmediately apparent. Indeed, the risks we worry about most are notnecessarily the ones that pose thegreatest threat.

Furthermore, experts and media aredivided in their perceptions of riskand, even among experts, the discus-sions are marked by uncertainty andcontroversy, which in turn distorts thepublic perception of risks. The panel-lists cited cases where scientists hadclearly failed to hit the right note so that the media had treated certainissues in a way that had not beenintended. “When you read some ofthe headlines, you just have to shakeyour head,” Joachim Lorenz, Head ofthe City of Munich’s Department ofHealth and Environment, commented.

Is media coverage an appropiategauge of the real risk?Dr. Otmar Bernhard, State Secretary in the Bavarian State Ministry of theEnvironment, Public Health andConsumer Protection, knows fromexperience that: “communicationbreaks down because there is a widegap between the media reports, theway individuals assess the risks, andthe scientific findings.”Dr. Bernhardappealed to those involved to be asrealistic and responsible as possible.

In practice, irrelevant risks are oftengiven a higher media profile than theydeserve. Prof. Hans Peter Peters ofthe Research Centre Jülich concludedthat: “the amount of media coverage is not a true indication of risk. Feelingsrun especially high if children areinvolved.” But, in general, relationsbetween science and media tended to be problematic as there were oftenconflicting views. Prof. Peters ap-pealed to science journalists to explainand question. We should see scienceas an investigative process. Once thepublic had grasped this, it wouldunderstand why experts held differentopinions.

In the risk debate, we should not losesight of the extent to which ourperception of risk is influenced by themedia. In the debate on fine dust inMunich, Dr. Joachim Käppner, LocalAffairs Editor of the SüddeutscheZeitung, commented that some timepreviously the threat to ban vintagecars had caused more furore than thehealth risk concerns. “In thosecircumstances, it is difficult to focusattention on the health risks.”

How can risk communication be improved? As well as precise information, themedia provided an arena for keepingpublic discussion on the right path inthe risk debate. For scientists, thismeans communicating with the mediain language they can understand. Politicians would be well advised notto use risk situations to score partypolitical points and to assess risksresponsibly. A potentially useful ideafrom the floor was to establish a coun-cil of scientists whose role would be to present the facts and help people toassess the risks.

At the end of the debate, ThomasLoster, Chairman of the Munich ReFoundation, thanked co-organisers,the GSF – National Research Centerfor Environment and Health, for their support and announced theresumption of the dialogue forums in 2007.

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Action

People in Mozambique regularly fall prey tofloods. In February 2007, 140,000 people had to be evacuated to safety from floodedareas in Central Mozambique.

32Famine in the 1980s – Microcredits in the 1990sMy initial experiences date back to 1982, whenI was sent to Mozambique by the GermanWorld Peace Service Organisation to work as a specialist in the agrohydrology section of theNational Institute for Agronomic Research(INIA) in Mozambique. At the time, there was a strict planned economy with state enterprisesand controlled markets. Food rationing cardswere in short supply, and people in the townswould be starving by around the 20th of themonth because they had none left. At the sametime, South Africa was pursuing a policy ofdestabilisation, which culminated in the civilwar and swelled the ranks of refugees withinthe country and beyond its borders. As at thetime virtually the entire rural infrastructure hadbeen destroyed, the population survived onlywith the help of international aid distributedunder the World Food Programme.

After three years, the war front moved north-wards and the situation deteriorated. We wereunable to continue our work at the Instituteand were forced to break off, leaving only withthe hope that our initiatives would bear fruit.Fortunately, we were able to launch a numberof interesting projects involving the use ofwind power in small-scale irrigation schemesand we constructed wind pumps for a numberof agricultural cooperatives supported by theWorld Peace Service.

I then became a project manager at GAPI, theeconomic development organisation foundedby the German Friedrich-Ebert-Stiftung inorder to set up a revolving fund for helpingsmall businesses and artisans in conjunctionwith Germany’s state-owned Kreditanstalt fürWiederaufbau (KfW) development bank. Myappointment coincided with a particularly in-teresting period because the ruling FRELIMOstate party performed an economic and polit-ical about-turn, which even pre-dated the era ofglasnost in the Soviet Union. The governmentsubsequently initiated an economic develop-ment programme which was supported by theWorld Bank.

In 1990, at the explicit wish of the Prime Minis-ter, GAPI was granted the status of being thefirst private finance institution in Mozambique.Thanks to international backing, we havetransformed GAPI into a development bank for small businesses. It grants loans and start-up funds – an idea popularised in Bangladeshby Muhammad Yunus, the banker and NobelPeace Prize winner (see page 17).

Mozambique achieved its independence fromPortugal in 1975. In the 1980s, civil war, theexodus of skilled Portuguese manpower, anddroughts took their toll. Things have improvedconsiderably since the signing of the 1992peace settlement, not least thanks to a policyof economic liberalisation. Mozambique wasone of the first countries to prepare a strategypaper on poverty alleviation and is well on theway to achieving the UN’s Millennium Devel-opment Goals. However, the country sufferedmajor setbacks when heavy floods occurred inthe spring of 2000 and 2001.

I have been involved in development work inMozambique on and off for over 14 years, and have witnessed at first hand the differentphases the country has gone through – first the socialist planned economy, then the para-digm change to a new economic system, andfinally the development process supported by the international donor community.

Wolfgang StiebensMozambique – A land of many faces

Mozambique was one of the first countries toprepare a strategy paper on poverty alleviation and is well on the way to achieving the MillenniumDevelopment Goals.

Action

In 1993, I began work at the head office ofGerman Technical Cooperation (GTZ) in Eschborn prior to being sent to Guatemala,where I was manager of the first disasterprevention project in Central America (FEMID)in the period 1996–2003.

Disaster prevention policyEquipped with this experience, I returned toCentral Mozambique in the summer of 2003 toput structures in place for the local disasterprevention programme. This mission has nowbeen successfully accomplished and Mozam-bique’s National Disaster Prevention Institute(INGC) has begun to apply the same approachthroughout the country as a whole. Further to its restructuring at the beginning of 2006,the INGC now concentrates its efforts entirelyon disaster prevention. It has set itself the task of applying local protection schemes, likeour River Búzi flood-warning system, to otherexposed regions. Apart from our work in thelocal communities, we also have to bear inmind the important role of politics.

In 2005, we advised government representa-tives about prevention measures whose start-ing point is the local people. We visited partsof Mozambique and Central America prone tonatural catastrophes, demonstrating solutionsthat are already working well there. It wasquite clear that the enthusiasm the people inthe risk areas themselves felt for the warningsystems soon spread to the politicians. Thecountry’s policy-makers now regard the disas-ter prevention policy backed by the Presidentof Mozambique as a key element in their devel-opment strategy. It has been incorporated inthe Action Plan For The Reduction Of AbsolutePoverty 2006–2009 (PARPA II), and the equiva-lent of €4.2m has been allocated to the INGC in the 2007 national budget. We will continueto give the policy-makers advice based on ourapproach in the future.

Rural development has now made great strides. For me, that day in 2000 in the Sus-sundenga district of the Manica Province when I saw my first ambulance since the darkdays of the planned economy marked a realturning point. Nowadays, schools, medicaland other social facilities are being built, andthere has been a definite change for the bet-ter. Interestingly, the political and economicreform was initiated by sections of the govern-ment which had held the reins during the civilwar and socialism periods. This has providedan institutional continuity not found in theLatin American context. Given the currentweak and diffuse opposition, this situation isnot likely to change in the immediate future.

A land of hopeMozambique’s economic development iscause for optimism despite the country’sheavy dependence on the international donorcommunity. The economy grew by 7.5% in2004, gaining further momentum in 2005. The final 2005 figure was expected to be closeto 10%.

Despite significant progress, a number ofproblems remain, including the quality of theschool system, lack of organisational capacity,rampant bureaucracy, and continued stateinfluence in the economy. However, develop-ments in the country inspire hope. Whether inthe towns or in the countryside, people arewelcoming and friendly and have an enquiringnature. It’s great to work in Mozambique.


33

Wolfgang Stiebens

Wolfgang Stiebens hasgained much valuableexperience during the 24years he has spent over-seas as an adviser andproject manager. He iscurrently working for theGTZ in Mozambique,where he is involved inrural development anddisaster prevention, andis also setting up flood-warning systems withthe backing of theMunich Re Foundation.

For me, that day in 2000 in the Manica Province whenI saw my first ambulance since the dark days of the planned economy marked a real turning point.

All systems runningMozambique flood-warning system

The Munich Re Foundation is supporting theinstallation of a flood-warning system onMozambique’s River Búzi, where floods regu-larly claim many hundreds of victims and rob people of their livelihoods. 2006 was a yearof consolidation and final adjustments.

Some 14 gauge stations have now been set up along the river. However, additional workneeds to be done on some of the gauges toensure they are able to withstand the force ofthe flood waters. The final adjustments alsoinvolved comparisons of precipitation inten-sities and flood-water levels. With the help of an expert from Honduras, a model was de-vised to indicate critical flood-water levels. The flood-water estimates are coordinated by the district administration authority. Tech-nical assistance is provided by the meteoro-logical and hydrological service.

The flood-warning system can only work if it is accepted by the local people. Our projectpartner, German Technical Cooperation (GTZ),accordingly made use of the May–October dry season to train additional volunteers toread the instruments and forward the data. A special radio frequency used for transmittingthe information was put through its paces.

A second emergency drill, in October 2006,was awaited with eager anticipation. Thenovelty of the first practice drill in 2005 havingworn off, the time had come to find out whetherpeople would know what to do in an emergen-cy. The outcome was promising. Coordinationand information systems worked well. Thevillage communities knew where the evacu-ation routes and temporary accommodationcentres were sited and performed their regis-tration, first aid, organisational and rehousingduties to perfection. It was also necessary toestablish how closely people in the immediatevicinity of the villages were involved in thepractice drill.

The drill confirmed that people living along theBúzi were prepared to deal with emergencies.The project is sponsored and backed by villageelders, mayors and the district president, and this has helped to make it a resoundingsuccess. The foundation was particularly pleased to note that the appointment of a newdistrict president did not affect the level ofsupport. The new administration has adoptedthe system as a best-practice model. The out-going district president was so impressed with the flood-warning system that he plans to introduce the idea in Caia, his new adminis-trative district, thus extending the impact ofthe foundation’s work beyond the Búzi. He hasalready set up a local flood-warning team.

Together with our local partners, we comparedthree potential risk areas on rivers that regu-larly flood – the Zambezi, Pungwe, and Save.We finally decided in favour of urgent actionon the Save. This is the most suitable site for a flood-warning system, when internationalaspects are also taken into account.

34

The project is sponsored and backed by villageelders, mayors and the district president, and thishas helped to make it a resounding success.

Evacuation and floodrescue drill on the river.In an emergency, peopleand their possessionsmust be taken to safetyas quickly as possible.

Action

A new subproject focuses on maps of the Búzi area drawn by local people, which showdanger zones and safe areas. It is importantthat people have access to accurate infor-mation so that they can help themselves in an emergency.

A subproject will now place the hand-drawnmaps on a scientific footing. The maps will bechecked using ultra-modern satellite- andcomputer-aided techniques (GIS) and amend-ed if necessary. The benefit is that, as well as enhancing existing maps, the technique canalso be used to prepare new ones. However,participative methods, like the hand-drawnmaps, are essential since people are more like-ly to accept the early-warning system if theyare directly involved and if their work is takenseriously. This also increases their awarenessof their own environment.

The Mozambique flood-warning system is a prime example of how simple and effectiveprojects can be. When the project was pres-ented at the Third International Conference onEarly Warning in Bonn in March 2006 and at other international conferences, it met withenthusiastic applause.

Hand-drawn maps a key feature35


Satellite image andhand-drawn risk map.Using modern tech-nology, the risk and evacuation plans drawnup by the local commu-nities can be verified toensure that individualperceptions of thesurrounding terrain arenot significantly differentfrom the reality.

© Copyright 2006 DigitalGlobe, Inc. All rights reserved – includes material, Longmont/USA

We never thought of giving upInterview with Kerstin Anker and Ernst Frost

The objective of the WaterFoundation Eben-hausen, which was established in 2000, is to improve supplies of clean water by setting up hydrological structures tailored to people’slives, culture, environment, technical andfinancial means.One such scheme, the Eritreanfog nets project – which is supported by theMunich Re Foundation – ran into unexpecteddifficulties in 2006.

What made you choose Eritrea as the focalpoint of the WaterFoundation’s work?

Frost: One of the WaterFoundation’sprimordial concerns is to provide local help inthe world’s poorest countries. We came toEritrea in 2003, working with Capuchin nunson a scheme for using donkeys to facilitate theonerous task of fetching water. I should pointout that the drought periods in Eritrea aregetting longer and the wells are graduallydrying up. Even now, women and children inAfrica have to walk for hours on end to fetchwater for their families. The project receivedgood coverage in the local press and as aresult we got to know a lady from Eritrea whohad been living in the Ebenhausen area forsome time. She was a tremendous help to uswhen it came to understanding the mentalityand culture and establishing contacts. In thisway, we gradually became more involved inthe country.

Anker: Before Eritrea, we tended to work inpatchwork fashion, first supporting well-diggers in Bolivia for instance, and thenperhaps a monastery in Nepal. However, wecame to realise that it was better to concen-trate on one thing at a time, because eachcountry has its own specific characteristics.The foundation can only succeed in the longterm if we understand and take due account of the local culture and mentality.

Frost: The fog nets idea was conceived on ourvery first visit to Eritrea. We were visiting another project when darkness fell and wesuddenly found ourselves shrouded in thick fog. From then on, we started consider-ing how the fog could be used to supply drinking water. We researched the subject onthe internet and finally came across theFogQuest aid agency in Canada, with whomwe got in touch.

Anker: By a stroke of good fortune, the lawfirm where I work does a lot of business inCanada, and so we arranged to meetFogQuest. I was impressed right from the start.FogQuest was determined to market the fognet technology, not for commercial purposesbut in order to help people. Similar netsalready existed in Yemen, for instance, andbecause Eritrea has similar climate conditionsand the foundation was already involvedthere, the Eritrean fog net project began to takeshape. Once we had found donors, we wereable to start looking for locations that could beused in the evaluation phase.

Frost: With the support of the Eritrean aidorganisation Haben, we organised the takingof measurements, such as wind and precipita-tion. Everything looked fine but, right in themiddle of the evaluation phase, the govern-ment issued a proclamation which meant theend of our cooperation with Haben. To be ableto continue, we had to find a national organisa-tion which met the government’s new require-ments. After a lengthy search, we came uponVision Eritrea.

Anker: We were no doubt helped by the factthat a presentation made by FogQuest to theEritrean Water Resource Department was verywell received. The Department realised thatfog nets were a completely new resource with enormous potential for supplying water to people on the high, arid Eritrean plateau at little cost and without sophisticated tech-nology.

36

Fog nets on the highplateau will capture fogwhich forms over theRed Sea. Test netsmeasuring just onesquare metre yielded 20 litres of drinkingwater a day throughoutthe November to Marchfog season.

Action

Did it never occur to you to give up because ofthe difficulties in Eritrea?

Frost: We never doubted that the project would be completed. One of our colleagueswas in the country at that time and, using hiscontacts, he was soon able to get in touch with Vision Eritrea, so that the transition wentslowly but smoothly. Also, the people them-selves were enthusiastic about our work, and itwas and is still appreciated by the authorities.

Anker: The project never really hung in thebalance, it was only delayed. We are pleasedto be able to continue our work in Eritreawhere we are still greeted with open arms.And when you meet the local people you feelyou just have to help. Eritreans are proud andwell-educated people. We help them to haveconfidence in themselves and to improve theirquality of life. What particularly motivates us is the way that they themselves pull out all thestops to make the project work.

How often do you go there?

Frost: Normally once a year. No doubt more in 2007 because a lot of things will just be starting up.

What stage has the project now reached?

Anker: Now that we have found the best locations, the detailed planning has begun. We have put together a project proposal with Vision Eritrea and prepared a budget and now have to wait for the go-ahead. TheWater Resource Department and the localauthority have been involved since the begin-ning. Subsequently, it will be a matter offinding a cheap way to fly the nets fromFogQuest’s production centre in Santiago de Chile to Eritrea.

Frost: Incidentally, on the technical side, it took quite some time to develop the nets. Toget the best yield, the mesh size and dimen-sions of the net have to correspond exactly.FogQuest has been working on this sinceabout the mid-80s. Initially we want to erect1,600 m2 in all. The nets themselves cost verylittle but we hadn’t realised how much thefreight costs would be. We have now found anacceptable solution. Of course, in the longterm, the aim is to produce the nets in Eritrea,if the situation permits.

Anker: Three people from FogQuest will set up the nets in the spring of 2007. The Directorof FogQuest, Dr. Robert Schemenauer, will be in charge. The whole project, including thenecessary cisterns and pipework, should befinished in 2007.

Do the nets need special maintenance?

Anker: They have to be checked regularly,especially after strong winds. Normally, theyshould be all right for the next three to fiveyears. After that, we may have to replace them.

Frost: Windstorm is the most commonproblem but there’s not much else. The localpeople look after them well. To monitor thequality of the water, we want to take samplesback at the very start to be checked inGermany.

Who services the nets?

Anker: For each installation a locally appointedwater committee is paid to organise the work.As is the case everywhere in Eritrea, waterextraction is not free. Everyone makes a con-tribution, for instance by working for the watercommittee. The idea is that the water tax will yield a surplus in the first few years whichwe will use in the future, helped by the localpeople of course, to provide microcredits. Andthe water tax will help to spread the messageof sustainability throughout the entire region.

37


Kerstin Anker and ErnstFrost, in the foreground,have been involved inthe fog nets project formany years. The photoshows them with repre-sentatives of the GermanEmbassy in Asmara.

Kerstin Anker, a partnerand board member ofthe law firm KnorrRechtsanwälte AG hasalso been on the Water-Foundation board since2003, where she isresponsible for legalissues as well as the fognets project.

Ernst Frost has beeninvolved in a variety ofnature conservationprojects since he workedas managing editor ofnatur+kosmos. He estab-lished the German“Bäume für Sarajevo”association in 1997. Theassociation has planted atree for each of the78,000 children in Sara-jevo. He founded theWaterFoundation in 2000together with HennerLang.

Tonga’s early-warning system to go on air2006 Foundation Prize

An important aspect of the work of the MunichRe Foundation is to promote leading-edgeprojects that tackle water, climate and vulner-ability issues. Priority is given to those whichbring about a direct improvement in livingconditions. The 2006 prize was awarded to theKingdom of Tonga for a radio-based early-warning system designed to prevent cyclonesand floods turning into disasters.

Recent natural catastrophes have been dra-matic proof that no country can consider itselfsafe. Natural events and catastrophes canstrike anywhere and are a serious threat. Sincelarge parts of South and Southeast Asia weredevastated by a tsunami in December 2004,the world has recognised the role of early-warning systems in warding off disasters. Hadsuch a system been operating at the time ofthe tsunami, countless lives might have beensaved.

Tonga, which is located in the South Pacific, ishighly susceptible to natural hazards. TheKingdom comprises more than 150 islands –45 of which are continuously inhabited – and is regularly hit by tropical cyclones andfloods. However, because the satellite systemTonga uses cannot function in high winds, thenational disaster protection service has onlylimited information about natural hazards, andespecially about cyclones. It is also difficult to alert people living in the more remote areas.To remedy this problem, Tonga’s disastermanagement and meteorological serviceshave launched an early-warning project whichinvolves setting up a reliable communicationsnetwork which will use high-frequency radiodata circuits to provide accurate forecasts andbroadcast the information throughout Tonga.

The project was presented at the Third Inter-national Conference on Early Warning (EWCIII), held in Bonn from 27–29 March 2006. Organised by UN/ISDR (International Strategyfor Disaster Reduction, Geneva) and DKKV(German Committee for Disaster Reduction,Bonn), the conference attracted some 1,000participants from more than 140 countries.Early-warning systems were presented anddiscussed in the context of the conferencemotto “from concept to action” providing use-ful tools for the policy-makers. The aim was to formulate specific proposals for closingcurrent gaps in early-warning systems.

Former US President Bill Clinton, UN SpecialEnvoy for Tsunami Recovery, stressed theimportance of the conference in the context ofincreasingly extreme catastrophes. Tragediessuch as Hurricane Katrina, which devastatedNew Orleans in August 2005, and claimed over1,300 victims, have left their mark. This is alsotrue of the earthquake that struck Pakistan lastOctober, and caused a death toll of nearly90,000.

The Munich Re Foundation awarded the foun-dation’s first prize at the conference. Sevenproject ideas were shortlisted out of the ori-ginal 130. They were judged in accordance with the foundation’s guiding principles. The €50,000 foundation prize was awarded toTonga. The Kingdom was selected because the foundation felt that its project was bestadapted to people’s needs and that it could be in operation within a reasonable time. It is also well set out, effective and suitable forapplication elsewhere.

The prize money will be used to give Tonga aneffective early-warning system by connectingit to the RANET-Pacific system, which usesspecial radio links that can relay forecasts andwarnings at all times, even in severe storms.This was not the case with the satellite-basedsystem.

Thomas Loster, Chairman of the Munich ReFoundation, explained the reasons for thechoice: “Our primary concern was to close agap in the warning system. Although there hasbeen an increase in international efforts toimprove early-warning systems, there are stillblanks to be filled, especially in remote areas.”Maliu Takai, Acting Director of the NationalDisaster Management Office in Tonga added:“Thanks to the foundation’s award, we will beable to get things moving and provide anearly-warning system for the outlying islandsas well.”

38

“Thanks to the foundation’s award, we will be able toget things moving and provide an early-warningsystem for the outlying islands as well.”

Action

It was agreed with Maliu Takai that the prizewould be paid in three instalments, the firstwhen the milestone plan had been submittedand the second and third as the installationmilestones were reached. Now that the TongaMeteorological Service has identified suitableinstallation sites, the next step is to purchasehigh-frequency antennae – which soundseasier than it is. The antennae are not particu-larly robust and tests in Papua New Guineaand Vanuatu showed that they were exposedto the full rigours of the Pacific’s tropical mari-time climate. It is hoped that the electronicequipment will be purchased and the antennaeinstalled soon. The project is scheduled forcompletion over a period of 12–18 months –hopefully before the next major cyclone strikes.

Other foundation projects in 2006

Water and health: Research project in one ofSouth India’s major cities Start-up financing for a research project beingcarried out by a student at the GeographicInstitute of the University of Bonn. The projectlooks at ways to reduce health risks for thepoor in cities like Chennai in India.

Seminar on climate- and water-related risksSeminar on climate- and water-related risksorganised as part of the Stockholm WaterWeek 2006 in conjunction with representativesof the Potsdam Institute for Climate ImpactResearch, World Conservation Union (IUCN),the United Nations University, Institute forEnvironment and Human Security and MunichRe’s Geo Risks Research unit. The speakersdiscussed strategies for coping with the effectsof climate change on water – as a resource andrisk factor.

Voluntary ecological service in TanzaniaSponsorship of a schoolgirl spending a yearworking on a voluntary basis at a vocationalschool in Mafinga, Tanzania, where the syllabus includes renewable energies.

Climate change dialogueSupport of an event organised by WECF e.V.(Women in Europe for a Common Future) andGreen City e.V. The international climateconference in Nairobi in November 2006 gaverise to a discussion on energy conservation,with invited experts.

39


Windstorm in paradise.With the help of theRANET-Pacific early-warning system, weatheralerts will be distributedmore quickly amongTonga’s more than 40inhabited islands. Thewarning system isfunded by the Munich ReFoundation.

The Board of Trustees takes all decisionsregarding fundamental issues and monitorsthe management of the foundation.

The members of the Board of Trustees are:

Dr. Hans-Jürgen SchinzlerChairman of the Supervisory Board of Munich Reinsurance Company (Chairman of the Board of Trustees)

Prof. Gerhard BerzFormer Head of Munich Reinsurance Company’s Geo Risks Research

Dr. Nikolaus von BomhardChairman of the Board of Management ofMunich Reinsurance Company

Prof. Hartmut GraßlFormer Director of the Max Planck Institute forMeteorology in Hamburg

Prof. Peter HöppeHead of Munich Reinsurance Company’s Geo Risks Research

Dr. Patrick IllingerScience Editor at theSüddeutsche Zeitung, Munich

Dr. Torsten JeworrekMember of the Board of Management of Munich Reinsurance Company (on theBoard of Trustees since January 2006)

Dr. Dirk JohannsenHead of Corporate Communications, MunichReinsurance Company

Christian KlugeMember of the Board of Management ofMunich Reinsurance Company (on the Board of Trustees until December 2006)

Prof. Lenelis Kruse-GraumannInstitute for Psychology, FernUniversitaet in Hagen, Universityof Heidelberg

Thomas LosterChairman of the Munich Re Foundation

Prof. Renate SchubertHead of the Institute of Economic Research ofthe Swiss Federal Institute of Technology,Zurich

Dr. Wolfgang StrasslMember of the Board of Management of Munich Reinsurance Company

Board of Trustees

Thomas LosterGraduate in Geography Chairman of the Munich Re Foundation

Dirk ReinhardGraduate in Industrial Engineering and ManagementVice-Chairman

Anne WolfGeographer, specialist in German Studies,MBAProject Management, Media Relations

Angelika BoosTeam Assistant

Ursula ForstnerProject Management (since May 2006)

Team 40

Picture credits

Gideon Mendel, CorbisCover

Thomas Loster, Munich Re FoundationInside front cover (1),Pages 8 top, 33

German Committee for Disaster Reduction (DKKV), BonnInside front cover (2)

Zeitbild Verlag, BerlinInside front cover (3), page 24

Oliver Jung, MunichInside front cover (4),Pages 6, 7, 8 bottom, 13

Stockholm International Water Institute (SIWI), StockholmInside front cover (5)

Ulla Baumgart, GSF – National ResearchCenter for Environment and Health, MunichInside front cover (6)

Germanwatch, BonnInside front cover (7), page 25

Inter District Operational Flood-WarningSystem for the Búzi River Basin (SIDPABB),Wolfgang Stiebens, Maputo/MozambiqueInside front cover (8),Pages 34, 35 bottom

Dirk Reinhard, Munich Re FoundationInside front cover (9)

Munich Re FoundationInside front cover (10), 19 bottom

Chris Steele-Perkins, Magnum Photos,Agentur FocusPages 2, 3

Stuart Franklin, Magnum Photos, Agentur FocusPages 10, 11

Hannes Lochner, Cape Town/South AfricaPages 16, 19 top

Arnd Wiegmann, ReutersPages 20, 21

Munich RePage 23

Grant Neuenburg, ReutersPages 30, 31

© Copyright 2006 DigitalGlobe, Inc. All rights reserved – includes material,Longmont/USAPage 35 top

WaterFoundation, EbenhausenPages 36, 37

Hans-Jürgen Burkard, BilderbergPage 39 top

F. Ayer, OkapiaPage 39 bottom

Sources

Prof. Hans-Georg Bohle, BonnPages 4, 5

Centre for Research on the Epidemiology of Disasters (CRED) 2006, BrusselsPages 12, 13

Munich Re Foundation, MunichPage 15

Munich Re, Geo Risks Research, NatCatSERVICE 2006, MunichPage 18

© 2007Munich Re FoundationKöniginstrasse 10780802 München, GermanyTelephone +49 (0)89/38 91-88 88Fax +49 (0)89/38 91-788 [email protected]: 80791 München, Germany

Order number302-05349

Editorial team Anne Wolf, Thomas Loster, Ursula ForstnerMunich Re FoundationAndreas Schuck, Munich

Editorial supportThomas Jacobitz, Karin Gross-Kaun and Sabine SiefenCorporate CommunicationsMunich Re

DesignKeller Maurer Design, Munich

LithographyZG Reproduktionen, Munich

Printed byWKD Offsetdruck GmbHOskar-Messter-Strasse 1685737 Ismaning, Germany

Publications

Report Microinsurance Conference 42

ReportMicroinsurance Conference 2005Making insurance work for the poor:Current practices and lessons learnt

Schloss Hohenkammer,Munich, Germany18–20 October 2005

Edited byCraig Churchill, Dirk Reinhard and Zahid Qureshi

IntoActionMicroinsuranceMaking insurance work for the poor

1January 2006

Munich ReFoundationFrom Knowledge to Action

Of the four billion peopleon earth today who live onless than two dollars a day,fewer than ten millioncurrently have access toinsurance.

In cooperation withPublished by

InternationalLabourOfficeGeneva

Report SummaryMicroinsurance Conference

Schloss HohenkammerMunich, 18—20 October 2005

By Craig Churchill, Dirk Reinhardand Zahid Qureshi

ReportMicroinsurance Conference 2005Making insurance workfor the poor: Current practices andlessons learnt

Edited by Craig Churchill, Dirk Reinhard and Zahid Qureshi

Text in English

IntoAction 1Microinsurance Making insurance workfor the poor

Edited by Craig Churchill, Dirk Reinhard and Zahid Qureshi

Text in English, French or Spanish

Publications can be ordered on the MunichRe Foundation website.

2005 reportAnnual reportof the Munich ReFoundation

Text in German or English


Edited by Craig Churchill

Published by the ILO and the Munich ReFoundation

Text in English654 pagesISBN 978-92-2-119254-1

2007overview

15 August“Water and climate day”together with other organisations, WorldWater Week, Stockholm,Sweden

From September, Dialogue forums: On the topic of “Living in Munich in 2030” (to be confirmed)

13 –15 November Third InternationalMicroinsurance Conference “Makinginsurance work for Asia”, Mumbai, India

8 MarchKick-off: Project “Climatechange and poverty”with Misereor, the Pots-dam Institute for ClimateImpact Research, theInstitute for Social andDevelopment Studies at the Munich School ofPhilosophy

7– 8 MayWorld Bank regionalmicroinsurance work-shop in cooperation with the CGAP WorkingGroup on Microinsur-ance and the Munich ReFoundation, in Rio deJaneiro, Brazil

1 JuneWorkshop of schoolscompetition“GO CLEAN!Business Award” on the occasion of the meeting of the EU Environment Ministers in Essen

22 –27 JulySecond Summer Academy on social vulnerability: “Mega-cities as hotspots of risk” at Schloss Hohen-kammer

Munich Re FoundationFrom Knowledgeto Action

2005 report

InternationalLabourOfficeGeneva

Munich ReFoundationFrom Knowledge to Action

Protecting the poorA microinsurance compendiumEdited byCraig Churchill

Munich ReFoundationFrom Knowledgeto Action

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annual report 2006

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