This document discusses risk transfer mechanisms (RTMs) as a policy approach for climate change adaptation and disaster risk reduction. It provides background on RTMs in international agreements and outlines categories of RTMs used by the World Bank and Munich Climate Insurance Initiative. The document then discusses how RTMs have been incorporated into national policies in several ASEAN countries and trends toward regional cooperation on disaster risk financing and insurance. It concludes by identifying issues and challenges for operationalizing RTMs, including establishing coordinating bodies and capacity building programs.