EVERY year, Bangladesh braces for disasters — cyclones in the Bay, floods in the lowlands, droughts in the north. Each time, thousands of families lose crops, livestock, or homes. Relief operations come swiftly, yet the fundamental question persists: how can vulnerable communities rebuild their lives?
In recent years, a new proposal has entered the debate, climate insurance. The concept seems straightforward. Just as people insure cars or houses, farmers and households would insure their crops or livelihoods against climate-related losses. If drought ruins the harvest, or floods inundate the fields, the insurance company compensates them. On paper, it looks like a modern, market-based response to climate risk. But beneath the surface lies a very different reality. Rather than shielding the poor, climate insurance risks shifting the burden of the crisis onto those least responsible for it. For Bangladesh, among the countries worst affected by global warming yet least culpable, this is not justice, it is burden-shifting disguised as resilience.
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Paying for crisis we didn’t cause
BANGLADESH contributes less than 0.5 per cent of global carbon emissions, yet it sits on the frontline of climate disaster. Farmers in Satkhira watch their fields turn saline and barren. Villagers in Kurigram see their homes swallowed by rivers every monsoon. Fishermen in Bhola lose nets and boats to cyclones. These communities have not fuelled the climate crisis, they are suffering from emissions belched out by distant factories, coal plants and highways.
Under the climate insurance model, however, the poor farmer is asked to purchase protection against a catastrophe created elsewhere. Premiums that appear modest by global standards weigh heavily on farmers already trapped by loans for seeds or fertiliser. In many cases, the eventual payout is so small that it fails even to cover the initial investment. The injustice is stark: people who did nothing to warm the planet are expected to underwrite their own survival. Instead of holding polluters to account, climate insurance pushes costs onto the victims, turning adaptation into a business venture in which the poor shoulder the risk while the wealthy continue to pollute without consequence.
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Illusion of security
INSURANCE is marketed as a guarantee of resilience, a promise that, no matter how severe the weather, families will have a safety net. In practice, the picture is far less reassuring. Payouts are often delayed, reduced, or denied outright. Compensation depends on strict thresholds based on rainfall or temperature data. Consider a farmer whose paddy crop has been destroyed by sudden flooding: if the nearest weather station records rainfall below the benchmark, no claim is paid. The crop is gone, but the loss is not recognised.
Even when compensation arrives, it is seldom enough to rebuild livelihoods. A modest sum may buy seed for the next season, but it cannot restore damaged soil, rebuild a collapsed house, or replace lost cattle. Instead of providing security, these partial payments deepen frustration.
Coverage itself is narrow. Current schemes largely cover rice or livestock, leaving vast sections of the rural economy exposed. Shrimp farmers on the coast have no protection when storm surges wash away ponds or when salinity creeps into waterways. Informal workers, women-headed households and landless labourers, among the most climate-vulnerable groups, are left out entirely. Far from being universal protection, climate insurance is a patchwork solution with gaping holes.
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Business in the name of resilience
IF THE flaws are so evident, why is climate insurance so strongly promoted? The answer lies in the interests it serves. For donors, banks and corporations, insurance opens a lucrative financial market. Rather than providing grants or reparations, they can repackage risk as a product. Communities that once demanded justice are now treated as customers.
This model also helps the global North avoid responsibility. At international climate negotiations, wealthy nations have long resisted calls for dedicated loss and damage funds, mechanisms to compensate vulnerable countries for climate impacts. Insurance offers a convenient distraction. Instead of paying for the damage their pollution has caused, rich nations can encourage Bangladeshis to ‘adapt’ by purchasing policies.
Meanwhile, the real problems go unresolved. Embankments in Khulna and Satkhira remain fragile. Unplanned urban growth in Dhaka continues to turn heavy rain into floods. Coastal erosion eats away villages in Bhola. No insurance premium will repair these structural failures. Genuine resilience demands investment in infrastructure, disaster preparedness and community-led adaptation, not financial products that profit from vulnerability.
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Justice, not premiums
BANGLADESH has shown extraordinary courage in the face of disaster. From rebuilding homes after Cyclone Sidr to constructing communal shelters against rising seas, its people have displayed solidarity and strength. But resilience must never be mistaken for a licence to exploit.
Climate insurance, dressed as innovation, is in truth a mechanism for shifting responsibility. It privatises risk, creates profit out of poverty, and absolves the guilty. The world must not expect poor farmers to pay premiums for a crisis they did not cause. What Bangladesh needs is climate justice: grants to support adaptation, investment to strengthen embankments and housing, and reparations from those who polluted the atmosphere.
As the country looks to the future, the choice is clear. Do we continue along the path of selling survival through insurance policies? Or do we demand a system that accepts responsibility, delivers justice, and truly protects people? The answer should be obvious. Disasters are not natural, and neither should be the suffering of the poor.
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Aminur Rahman is a researcher and seasoned development professional. Atina Chakma is an indigenous youth activist and research fellow at Oxfam Bangladesh.