Representatives from the Asian Development Bank (ADB) and the Organization for Economic Cooperation and Development’s (OECD) Global Seminar on Disaster Risk Financing fostered an in-depth debate on the development of effective approaches to the financial management of disaster risks, in Kuala Lumpur, Malaysia on September 17 and 18.
As reported in a bulletin from the Microinsurance Network, “key topics at the meeting included the need to develop strategies for disaster risk financing and funding of disaster recovery, the role of insurance in supporting financial resilience and the development and support of an insurance culture.”
Microinsurance Network Chair Michael J. McCord explained: “Until the role of governments is clear, others will find it difficult to enter the market through insurance or other means, as, if people presume the government will take care of them, they will feel no need to buy insurance.” As a result governments need to develop standards for their provision of disaster relief.
Ivo Menzinger from Swiss Re stressed that the “obstacles encountered in providing adequate reinsurance often do not stem from the supply nor technical side, but rather depend on political will.” He also noted that there is “already excess capacity to address many of the disaster risks, but the short time frames of governments, and a reluctance and unwillingness for long-term planning and spending, means insurers and reinsurers are unlikely to insure. Only once governments have clear standards and planning in place, can insurers come in.”
McCord pointed out that the importance of including clear standards should be recognized, when determining its fit in terms of emergency, recovery and reconstruction. He said: “It is clear that microinsurance has a critical role to play in disaster risk management in terms of helping prepare low-income people for disaster – helping them immediately after the event and helping them rebuild their lives and businesses. Along with governments, and relief organizations, insurers are a key pillar in disaster risk management.”
The bulletin also explained that the “network attendance at the meeting facilitated and enhanced dialogue on the importance of clear government standards, as well as the need to look, not only at immediate relief post-disaster, but also at longer-term concerns for rebuilding businesses and lives. It is expected that the lessons from the meeting will be incorporated by the ADB and the OECD into future planning and implementation, thereby creating new opportunities for Network members to engage in the sector in the future.”
Source: Microinsurance Network
Was this article valuable?
Here are more articles you may enjoy.