Publication: Disaster Risk Financing : Case Studies
Loading...
Published
2011-03
ISSN
Date
2012-08-13
Author(s)
Editor(s)
Abstract
In this note, the instruments supporting risk retention and risk financing at the national and regional/international levels will be the sole focus. Risk transfer, including insurance, is a very broad subject and requires a separate discussion; however, when a hybrid solution involves a transfer of risk or an instrument at the household or community level, a brief explanation of the instrument ensues. To this end, the note reviews examples generally considered to be good practices in the sector and seeks to elucidate well-regarded risk retention instruments and financing. The choice of instruments in disaster risk financing depends on many factors. One way of looking at it is to classify the disasters in terms of their expected severity and frequency. More frequent disasters with low expected severity are better financed by retaining the risk, as the cost of transferring such risk will be disproportionately high compared to the expected damages or payments. On the other hand, risk associated with low frequency-high severity disasters is best transferred to the international reinsurance market, as government may not have the capacity and resources to sustain the damages caused by such disasters. Finally, as the case studies in this note indicate, the uptake of risk retention and risk transfer mechanisms has made countries more resilient to natural disaster.
Link to Data Set
Citation
“Poundrik, Sandeep. 2011. Disaster Risk Financing : Case Studies. EAP DRM Knowledge Notes; No. 23. © World Bank. http://hdl.handle.net/10986/10104 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Managing Agricultural Risk at the Country Level : The Case of Index-Based Livestock Insurance in Mongolia(World Bank, Washington, DC, 2007-08)This paper describes the index-based livestock insurance program in Mongolia designed in the context of a World Bank lending operation with Government of Mongolia and implemented on a pilot basis in 2005. This program involves a combination of self-insurance by herders, market-based insurance, and social insurance. Herders retain small losses, larger losses are transferred to the private insurance industry, and extreme or catastrophic losses are transferred to the government using a public safety net program. A syndicate pooling arrangement protects participating insurance companies against excessive insured losses, with excess of loss reinsurance provided by the government. The fiscal exposure of Government of Mongolia toward the most extreme losses is protected with a contingent credit facility. The insurance program relies on a mortality rate index by species in each local region. The index provides strong incentives to individual herders to continue to manage their herds so as to minimize the impacts of major livestock mortality events; individual herders receive an insurance payout based on the local mortality, irrespective of their individual losses. This project offered the first opportunity to design and implement an agriculture insurance program using a country-wide agricultural risk management approach. During the first sales season, 7 percent of the herders in the three pilot regions purchased the insurance product.Publication Fiscal Disaster Risk Assessment Options for Consideration(World Bank, Washington, DC, 2015-06)Pakistan is vulnerable to a number of adverse natural events and has experienced a wide range of disasters over the past 40 years, including floods, earthquakes, droughts, cyclones, and tsunamis. The World Bank is supporting the Government of Pakistan (GoP) in building capacity in the area of disaster risk management (DRM) in order to build resilience from both humanitarian and fiscal shocks associated with natural disasters. The World Bank is providing technical assistance to the GoP for the development of a national disaster risk financing strategy. This non-lending technical assistance aims to: (i) assess the fiscal exposure of the GoP to natural disasters; (ii) present options for the development of a national strategy to improve financial response capacity for natural disasters; and (iii) promote property catastrophe risk insurance for both public and private dwellings. Disaster risk financing and insurance (DRFI) is one of the five pillars in the proactive and strategic framework for DRM promoted by the World Bank. The World Bank has been promoting a proactive and strategic framework for DRM based on five pillars: (i) risk identification; (ii) risk reduction; (iii) preparedness; (iv) financial protection; and (v) resilient recovery. Chapter one is introduction. Chapter two presents an overview of the budget processes for the financing of natural disaster losses during each of the three post-disaster phases. Chapter three provides a preliminary financial disaster risk assessment for Pakistan, focusing particularly on the fiscal impact of natural disasters. Chapter four presents an overview of the private catastrophe insurance market; and chapter five reviews the options for future financing of natural disaster recovery and reconstruction expenditures.Publication Catastrophe Risk Financing in Developing Countries : Principles for Public Intervention(Washington, DC: World Bank, 2009)Public intervention in catastrophe insurance markets, supported by the donor community and the World Bank, should be country specific. Low-income countries, where the domestic non-life insurance market is undeveloped, should focus in the short term on the development of sovereign catastrophe insurance solutions and the promotion of public goods related to risk market infrastructure. These countries are usually not mature enough for the promotion of catastrophe insurance pools for private homeowners. Middle-income countries, where the domestic non-life insurance market is more developed, should help the private insurance industry offer market-based catastrophe insurance solutions to homeowners and to small and medium enterprises, including the agricultural sector. This book offers a framework, with lessons drawn from recent experience, guiding principles for public intervention and potential roles for donors and International Financial Institutions (IFIs). These lessons are expected to be used in developing affordable, effective and sustainable country-specific catastrophe insurance programs.Publication Agricultural Risk Management in the Caribbean : Lessons and Experiences, 2009-2012(Washington, DC, 2012-10)The purpose of this report is to summarize the main results and lessons learned during the implementation of the World Bank technical assistance (TA), which are valuable to the ongoing discussion on agricultural risk management in the region. The report is organized as follows. Section two summarizes the program risk management strategies, including initial objectives and final outcomes. In particular, it describes how these objectives change in order to respond to the countries' particular demands. Section three presents the methodology and basic principles applied in the four stages of the program implementation. Six country cases are summarized in section four with a complete description of final outputs and recommendations. Finally, section five presents the main conclusions and lessons learned.Publication A Workshop on Disaster Risk Reduction and Risk Transfer : Toward Concrete Action in South Asia and East Asia and the Pacific(Washington, DC, 2008-05)This is a summary report of the South Asia Region and the East Asia Pacific regions training workshop from April 28-30, 2008 on the importance of disaster risk reduction and risk transfer including major concepts, models, and various applications of disaster risk reduction around the globe. This report represents an analysis and summary of the main presentations made during the course of the workshop. It provides a comprehensive assessment of the major points of discussion and an overview of the salient issues that emerged during the event. Specific policy recommendations are also outlined here which will serve as an important instrument for relevant Bank projects and client governments facing issues of how to mainstream disaster risk reduction practices into development initiatives.
Users also downloaded
Showing related downloaded files
Publication Business Ready 2024(Washington, DC: World Bank, 2024-10-03)Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.Publication South Africa Country Climate and Development Report(World Bank, Washington, DC, 2022-10)South Africa's ambition is to build a more inclusive, resilient and sustainable economy. This ambition depends on the extent to which the country is able to shift from its heavy dependence on coal to low-carbon activities and to address the growing risks presented by climate change. This low-carbon path and adaptation must be people-centered, creating jobs and protecting the poorest in the most unequal society in the world. All of these require policies and actions with inevitable tradeoffs and some synergies. The South Africa Country Climate and Development Report (CCDR) provides analysis and recommendations on integrating the country’s efforts to achieve rapid growth, higher employment and lower inequality with the pursuit of a low-carbon and climate resilient development path. The CCDR provides a summary of key challenges and opportunities for the country's transition to a low-carbon economy in a just way. The report also provides assessment of what it takes (in terms of technical, financial and institutional and governance framework) for South Africa to achieve net-zero emissions by 2050 without undermining its development ambitions. The report examines ways in which South Africa could adapt and build resilience to a changing climate. Finally, the report provides priority packages of policy recommendations that South Africa could implement to achieve its just transition to a low-carbon economy and society by 2050.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.