The International Federation of Red Cross and Red Crescent Societies (IFRC) has activated its Disaster Response Emergency Fund (DREF) insurance policy for the first time, prompted by disaster relief demands in 2024 exceeding the fund’s deductible threshold of $39.27 million (CHF 33 million).
This unprecedented payout results from a groundbreaking indemnity insurance policy that the IFRC established in partnership with Aon and several reinsurers. The DREF is designed to provide immediate funding to National Red Cross and Red Crescent Societies during smaller-scale emergencies, but has increasingly faced financial pressures in recent years. To address these challenges, the IFRC initiated the insurance policy in early 2023, paying an annual premium of $3.57 million (CHF 3 million).
Under the terms of the policy, the maximum payout is capped at $17.85 million (CHF 15 million) if natural disaster relief demands exceed the $39.27 million (CHF 33 million) threshold within a single year. In 2024, the devastation caused by Super Typhoon Yagi pushed the DREF’s natural disaster response over this threshold, activating the insurance coverage.
As of the end of September, the IFRC reported nearly 100 separate allocations from the DREF, with disaster-related expenditures surpassing $39.27 million (CHF 33 million). Future requests for disaster relief for the remainder of the year will be covered by the insurance policy, up to the stipulated limit of $17.85 million (CHF 15 million).
Nena Stoiljkovic, IFRC’s Under Secretary General for Global Relations and Humanitarian Diplomacy, announced the insurance payout during an event at the United Nations General Assembly, highlighting its significance as the first instance of a commercial insurance policy covering global humanitarian disaster costs.
In 2024, DREF allocations have supported various Red Cross and Red Crescent Societies, including $878,422 (CHF 738,170) allocated to the Philippines Red Cross for flood response efforts in August, and a substantial $1.12 million (CHF 943,271) disbursed to the Sudanese Red Crescent for flood relief in September, marking the largest allocation this year.
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