Promoting Disaster Risk Financing in Asia and the Pacific
Challenges to disaster risk financing can be overcome through public-private partnerships and state-sponsored disaster insurance schemes.
Economies in Asia and the Pacific are often exposed to disaster risks, which can cause huge fatalities and economic losses. Governments need to be able to accurately assess the economic impact of disasters, develop and design schemes to enable post-disaster responses, ensure that the financial sector provides coverage against the risk of disasters, and manage contingent liabilities within the fiscal framework. Fulfilling this role has proven to be a big challenge. In this brief, we explore public and private options for overcoming those challenges and promoting disaster risk financing (DRF) in Asia and the Pacific.
- Economies in Asia and the Pacific are often exposed to disaster risks, which can cause fatalities and economic losses. One strategy to mitigate those losses and strengthen financial resilience to disasters is developing DRF.
- Two policy options for implementing DRF: public sector and private sector DRF tools. Each option has its challenges.
- Two strategies for overcoming implementation challenges of DRF: (i) establishment of institutional arrangements for a combined public–private response to DRF, and (ii) the development of a state-sponsored disaster insurance scheme.