This technical paper provides information on the financial mechanisms used to manage risks from the direct impacts of climate change. The mechanisms described include both insurance mechanisms and other forms of risk spreading and sharing, referred to as non-insurance mechanisms. Developing countries require a portfolio of mechanisms, which may include insurance, to manage risks, as no one mechanism can meet the range of circumstances required by all countries. The paper considers hazards, assets and vulnerability in the context of climate change, and reviews several options for managing financial risks from impacts of climate change in developing countries. It also proposes three innovative financing schemes for this purpose. The role of external support in helping developing countries finance appropriate risk-sharing mechanisms is part of this consideration. Parties may use the information contained in this technical paper as they consider implementing adaptation action under the Convention, particularly in the work of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention on enhanced action on adaptation, including the in-session workshop on risk management and risk reduction strategies. The information could also be considered by Parties and organizations in their actions to manage financial risks from the direct impacts of climate change and to enhance resilience to the impacts of the adverse effects of climate change.