disaster risk finance - abac
TRANSCRIPT
Disaster Risk Finance
INSURANCE AND RISK SHARING MODELS AND OPTIONS
APRIL 27, 202
ABAC DISASTER RECOVERY PLANNING AND RISK MANAGEMENT TASK FORCE MEETING
BENEDIKT SIGNER
WORLD BANK
Fundamentals of Disaster Risk Finance
Four Core Principles
of Risk Financing
And how can ABAC
members support
resilient economies?
2
Timeliness of Funding No One Financial Instrument Can Address All Risks
To make sound financial decisions you need to have the
right information
How money reaches beneficiaries is as important
as where it comes from
Introduction to DRF Analytics
Core Principle 1: Disaster Risk Layering
HAZARD TYPE
F INANCING INSTRUMENT
Lo
wFre
quency
/
Hig
hSeve
rity
Hig
hFre
quency
/
Lo
wSeve
rity
Market-Based
Instruments
Contingent
Financing
Budgetary
Instruments
NO SINGLE FINANCIAL INSTRUMENT CAN ADDRESS ALL RISKS
Inte
rna
tio
na
l A
ssis
tan
ce
(u
nce
rta
in)Risk Transfer
Contingent
Credit
Budget
Reserves/
Reallocations
Risk transfer for assets such as property insurance or agricultural insurance and risk transfer for budget management like paramedic insurance, cat bonds/swaps
Financial instruments that provide liquidity immediately after a shock
Reserve funds specifically designated for financing disaster related expenditures, general contingency budgets, or diverted spending from other programs
3Fundamentals of Disaster Risk Finance
Introduction to DRF Analytics
Risk Layering In Practice: Philippines’ DRF strategyRole of the Bus iness community?
4Fundamentals of Disaster Risk Finance
Introduction to DRF Analytics
Core Principle 2: Timeliness of funding
Speed matters, but not all resources are needed at once.
RE
SO
UR
CE
RE
QU
IR
EM
EN
TS
($
)
T IME
Relief
Recovery
Reconstruction
5Fundamentals of Disaster Risk Finance
Early Action?
Introduction to DRF Analytics 6
Core Principle 3
How money reaches beneficiaries is as important as where it comes from
Fundamentals of Disaster Risk Finance
Government DRF Strategy
Public Services
Livelihood Support
Public Assets
$
Introduction to DRF Analytics
To Make Sound Financial Decisions you need to have the right information
DRFI
ANALYTICS
Quantitative Analytics
Financial Decision Making Tools
Financial Impact Analysis
Cost Benefit Analysis
Loss Data (Historical
Data/CAT Risk Model
Microeconomic Data
Financial and other Data
Understanding Financial
Impact of Disasters
Make evidence based
financial decisions
Leverage private financial
markets using quantitative outputs
Monitor and evaluate
DFRI strategies
7Fundamentals of Disaster Risk Finance
Core Principle 4: Data and Analytics
Fundamentals of Disaster Risk Finance
Role for
ABAC
members to
support
resilience?
8
- Support government to implement risk management and risk financing policies and instruments.
- Clarify ‘risk ownership’ in PPPs and concessions.
- Integrate risk in private investments and planning.
- Advocate for better integration of resilience in public investment, planning, and service delivery.