At the U.N. climate talks last December, the United States pledged $10 billion to a fund that will help the hardest-hit countries adapt to rising seas, shifting water resources and altered disease vectors Microinsurance -- insurance designed to be affordable for the world's poor -- is one of the tools generating excitement and not just among relief groups and other non-governmental organizations.

"Because of things like location, education and life expectancy, the world's poor are a lot more vulnerable to climate change," said Koko Warner, who heads the U.N. University's work on environmental migration, vulnerability and adaptation.

Within a decade, the Intergovernmental Panel on Climate Change predicts 207 million people in Latin America, Asia and Africa won't have enough water. By 2100, crop revenues in Africa will be down 90 percent. And at ground zero of the consequences of climate change, Bangladesh could see 15 million people -- 1-10th of its population -- migrating to higher ground.

A report by the British insurance market Lloyd's caught the business world's attention last year with estimates that the global microinsurance market is growing at a rate faster than 10 percent a year and could boom to as many as 3 billion policies.

Most of that growth is in health insurance and life insurance policies, which have taken off in places such as India, South Africa and Indonesia. These products are often linked with other microfinance products like small business loans and are sold by banks with years of experience in the local communities.

By initially subsidizing the policies, non-profit groups proved that the products could be both appealing to the poor and financially sustainable. Now for-profit companies are jumping into the market. LeapFrog Investments has raised nearly $140 million from financial giants such as J.P. Morgan, TIAA-CREFF and the Soros Economic Development Fund to invest in local insurance companies.

"It's a simple concept that has been attempted by governments and non-profits," said Andrew Kuper, LeapFrog's president and founder. "Now, business is bringing discipline and capital and we're seeing a massive mushrooming. There is a huge potential market here."

With many health and life insurance programs in the black, non-profits are turning their attention to insurance products that can play a more direct role in cushioning the world's poorest from the effects of climate change. In 2007, the Gates Foundation granted microfinance group Opportunity International nearly $25 million to beef up its insurance programs and one of the ways it has spent that money is developing policies that protect against the risk of extreme weather events such as drought, flood and typhoon -- events that stand to become more frequent as the climate changes.

"We realized that in some places, in order to reach real scale, we'd have to get into crop insurance," said Richard Leftley, who runs MicroEnsure, a subsidiary of Opportunity International, which began its crop insurance work in Malawi. "We wanted to lend to these people but everyone was terrified by what would happen if there was a drought. We realized no one was going to be able to pay back the loan."

Since the Malawian farmers were working on a very small scale -- usually about 2 acres each -- and were located in difficult to access areas, traditional crop insurance wouldn't work.

"It just wasn't going to be feasible to send an agent out on a motorbike to see if someone had a good crop or a bad crop," Leftley said. "By the time you've got on the motorbike, you've spent the premium on gasoline."

Instead, the company designed policies based on weather indexes. If farmers lived within a 12-mile range of a weather station, they could buy a policy that would make payouts based on the amount of rain measured at that weather station. If too much or too little rain came during critical points in the growing season, insured farmers would get cash, usually within 10 days.

For people living on a few dollars a day, timeliness is key. If a payout doesn't come quickly, they'll miss the chance to buy and plant new seeds before the next rains come or they'll be forced to sell their crop got at a low price in order to put food on the table that day.

That payout can make a huge difference in a family's future. Not only does the money allow them to keep putting food on the table and their children in school even if the crop fails, it can also prevent them from becoming steeped in a debt that can last generations.

And whereas many communities traditionally provide safety nets for each other -- sharing food and money when a family member dies or a crop fails -- weather-related disasters stretch that net since they tend to hit the whole community.

"If everyone in a village gets hit by a bad flood, who do you turn to?" asks Warner. "This is one of the compelling questions that climate change poses."

Experts are careful to say that insurance isn't the answer alone. For one thing, it's not an easy sell to people with no expendable income who are unfamiliar with financial products. Collecting enough weather data in areas of the world with little infrastructure, getting the buy-in of the local government and pricing the products at an affordable level also pose stiff challenges.

Michael McCord, who runs the consulting firm MicroInsurance Centre, said he's a skeptical optimist about weather index crop insurance's prospects.

"In some places we're starting to get a relatively clear picture now of where we're going to have constant, year-on-year events," he said. "Where those things are happening, we need to start changing crops and thinking about where people are going to have to start moving."

With a $10 billion risk mitigation proposal before the U.N. adaptation fund, Warner said insurance is an important piece of the puzzle, but it's just a piece.

"Climate change is really going to affect millions of people and insurance won't take that away," she said. "What it will do is give governments a little area of certainty over which they can plan."

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