Preliminary Study and Learning Assignment on the IFRC’s Insurance for DREF

In 2023, the International Federation of Red Cross and Red Crescent Societies (IFRC) launched a pioneering insurance product to strengthen its Disaster Response Emergency Fund (DREF).

The DREF is a rapid financing tool used to support Red Cross and Red Crescent Societies in responding to small-to-medium-scale disasters. The insurance was designed to help IFRC manage rising global disaster risks, ensure more predictable funding, and scale the DREF’s capacity to meet increasing demand.

The DREF Insurance operates on an indemnity basis, which is a world first for the humanitarian sector. This means the insurance pays out when actual DREF spending on natural hazards in ODA-eligible countries exceeds CHF 33 million, rather than being triggered by hazard indicators (parametric insurance). In its first year, the IFRC secured CHF 14.4 million in coverage for a CHF 3 million premium.

Ecorys was commissioned by the IFRC, with funding from the InsuResilience Solutions Fund (ISF), to conduct an independent evaluation of the pilot phase. Our role was to assess the process of designing and implementing the insurance, gauge stakeholder satisfaction, and provide strategic recommendations for the next phase of development.

As the first indemnity insurance model in the humanitarian space, the IFRC-DREF Insurance presented an opportunity to test a new financial mechanism under real-world conditions. Ecorys carried out a process evaluation, combining a document review with stakeholder interviews across the IFRC, private sector partners, and donors.

Our evaluation focused on three areas:

• Development and design of the DREF Insurance
• Implementation of the DREF Insurance
• Future of the DREF Insurance

We found that the insurance was successfully delivered through a complex, multi-stakeholder process—a significant achievement given the novelty of the model. The project was characterised by strong leadership, cross-sector collaboration, and senior-level support within the IFRC.

Our findings show that the DREF Insurance has fulfilled its purpose as a proof of concept:

• Stakeholder satisfaction: Most partners viewed the design as well-tailored and innovative. The product increases DREF’s funding flexibility without locking IFRC into unaffordable premiums.
• Organisational learning: The process enhanced understanding within IFRC of risk transfer tools and clarified internal categorisations of disaster types.
• Strategic alignment: The product aligns with IFRC’s ambition to diversify financing and with donor priorities around Disaster Risk Finance.
• Operational impact: The insurance was designed to work in the background without requiring changes to DREF disbursement processes—a critical success factor for a first pilot.

Looking ahead, the insurance offers a potentially scalable model to strengthen disaster response funding globally. Success in triggering the product and securing sustained donor interest will be critical to its long-term viability. Ecorys were commissioned by the IFRC to conduct a follow-on evaluation on the Implementation of the PMEL Framework of the IFRC DREF Insurance running from 2024-2026.