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southasiadisasters.netMay 2015 1

southasiadisasters.net May 20152

ABOUT THIS ISSUE

Disasters are considered to begreat levellers. For they strike

without discriminating between therich and poor or the powerful andplebeian. However, thevulnerability to a hazard is oftendriven by social, economic, politicaland cultural conditions. Since, therisk of a disaster is a function ofhazard, vulnerability and exposure;therefore it can be summed up thatpeople of lower socio-economicstatus bear a greater brunt of theserisks as compared to their moreaffluent counterparts. The threat ofclimate change has furthercompounded the vulnerability ofthese marginalized communities.

Such communities are oftendependent on small and informalbusiness units to earn their living.Since the majority of such businessunits do not posses any recoverymechanisms, they invariably fail torecover in post-disaster situations.This issue of Southasiadisasters.netfocuses on the concept of disastermicroinsurance as an effective risktransfer mechanism for suchinformal and small scale businessesin urban settings. In the face of thegrowing threat of climate change,disaster microinsurance can also beviewed as a means of effectiveadaptation.

Titled 'Risk Insurance and Adaptation:Managing Urban Risk', this issue alsohighlights the findings and progressof AIDMI's current project funded byHIF which seeks to promote disastermicroinsurance for local marketrecovery. Full of insights fromexperts from the field of disaster riskreduction and climate changeadaptation, this issue is must read forall interested to know more aboutdisaster microinsurance as a risktransfer mechanism for the poor.

– Kshitij Gupta, AIDMI

KEY PIECE

Effective Risk Transfer andInsurance Solutions and theSendai Framework for DRR2015–2030For many countries, sectors,

populations and geographiesaffected by disasters, risk transferand insurance are key measures thatcan be employed to increaseresilience in advance of these eventsand enhance recovery efforts in theiraftermath. While these tools enablegovernments, businesses, andhouseholds to protect themselvesagainst the financial losses broughtby disasters, there is a growingawareness that these risk sharingsystems can deliver wider resiliencebenefits, and indeed play a moreproactive role in curbing the creationof new risk and in nurturing anenabling environment for risk-sensitive public and privateinvestment.

The Sendai Framework for DisasterRisk Reduction 2015 – 2030 (SFDRR)places risk-sensitive private, as wellas public, investment at its core, andexplicitly calls for the developmentof effective risk transfer andinsurance solutions. However,while the language of Para 30 (b) isof evident relevance to the insuranceindustry – addressing as it does keyissues of access and inclusion – theimplications of the SFDRR for theinsurance industry go well beyondissues of financial protection.

Undertaken in isolation, ex post risktransfer measures representincomplete disaster riskmanagement solutions. The shift toinvesting in reducing the existingstock of risk, preventing andavoiding the creation of new risk,

and building resilience is essentialif positive returns and the reducedneed for recovery are to be realised.The insurance sector has for example,contributed to an enhancedunderstanding of risk by translatingscience and engineering knowledgeinto financial information that caninform investment and policyoptions, zoning laws and buildingcodes are exemplars. Insuranceschemes can provide incentives forenhanced disaster risk reductionmeasures and compliance to existingstandards, with wider resiliencebenefits for society at all levels.

However, with almost 70 percent ofthe world's population not havingaccess to adequate insurancesolutions, such contributions are notuniversally observed – particularlyin emerging markets – and givendemographic and climate changetrends, the greatest vulnerabilitywill be in developing economieswhere disaster insurance penetrationis essentially nonexistent; a scenariothat may worsen with a changingclimate and evolving exposure.

In order to close these gaps,concerted multi-stakeholder effortsare required. These include a raft ofmeasures including: financialliteracy; public-private partnership(PPP); micro-insurance; joint datacollection efforts and compulsoryinsurance1. Governments developand implement policy, regulatoryand legal frameworks within whichinsurers operate and compete. Theseframeworks are critical to how

1 The Geneva Association, 2014. The Global Insurance Protection Gap-Assessmentand Recommendations. The Geneva Association (The International Associationfor the Study of Insurance Economics), Geneva/Basel.


effectively and efficiently theinsurance industry is able to manageits risk exposures. Regulatoryframeworks, incentives and public-private collaboration are also criticalto providing vulnerable communities,particularly in developing countries,access to risk management servicesand risk transfer products offered byinsurers. Many of the moreinnovative policy and technicalinnovations in developing effectivedisaster insurance are emanatingfrom low and middle income countries.

The regulatory framework in manycountries for instance, can bedeveloped such that the poorest canbenefit. Regulation in the Philippinesfor example, was developed so thatinclusive (disaster related) insurancesolutions could flourish. Other statesare examining specific risk transfersolutions that are designed to offerinclusive insurance solutions for thepoorest – micro-insurance2 andmutual-insurance3 for example. Forthe poorest, it is critical that insurancesolutions are both affordable, andfair, particularly with regard topossible payouts – stark mismatchesbetween expected and realizedprotection are currently common.

Effective risk transfer mechanismsare those that reflect the type andscale of risks to which eachindividual, country, region isexposed, and which are aligned withprevailing policy objectives. Therange of measures available to furtherdisaster risk reduction are diverse –from tailored regulatory measures,to stress tests for extreme events, toadvanced PPPs – and improvementsare possible across the board. – Marc Gordon, UNISDR – UN Office

for Disaster Risk Reduction

2 IAIS, 2007: "Issues in the regulationand supervision of micro-insurance",June, Basel.

3 IAIS, 2010: "Issues Paper on theRegulation and Supervision ofMutuals, Cooperatives and otherCommunity-based Organisations inincreasing access to InsuranceMarkets", October, Basel.

DEMAND SURVEY

The Demand for Disaster Microinsurance:Designing Demand Survey for UrbanInformal Small Businesses

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For more than a decade Mrs. and Mr. Sahoo have been involved in the smallbusiness of selling vegetables in the city of Puri. They operate their businessfrom a kiosk which is a non-permanent structure. Due to this, their businessincome losses during 2013 cyclone phailin. They are gradually recovering byusing their savings.

AIDMI along with Stanford University and HIF are working in a projecttitled 'Innovating Disaster Microinsurance for Local Market Recovery'

under this project a demand survey for developing a suitable microinsuranceproduct was initiated in the Puri district of Odisha state of India in February2015. A similar demand survey will take place in the other two sites –Assam and Tamil Nadu. Both of these states have different baseline hazardsfrom Puri. The site in Tamil Nadu is a coast line city prone to floods andcyclones whereas Guwahati, in Assam, is a higher density area prone toearthquakes, flash floods and landslides.

The demand survey is targeting around 1500 small businesses from eachurban site. This demand survey will help define the insurance requirementsrelated to the protection of small businesses from hazards, primarily climatic-related hazards.

The initial demand survey in the Puri city of Odisha revealed the followingphysical structures of small businesses.1. Permanent fixed shops (brick and cement material)2. Fixed stalls, but wooden or makeshift material3. Temporary stalls that are arranged and removed everyday4. Mobile (like cycle and Trollies)5. Home based manufacturing6. Workshops.

Economic growth, urbanization and climate change are transforming theglobal risk landscape, and thus the markets for insurance. Some of thesechanges are contributing to an increase in the demand for disaster insurance.The demand survey analysis will reveal how insurance is perceived. Theapproach to education and incentives will be designed based on this analysis.

for more information: www.elrha.org/hif-blog/demand-survey-on-disaster-microinsurance-for-small-businesses-in-urban-areas/


RESEARCH

The Importance of Data and the Complexityof Getting ItFor too long humanitarians have

been trapped in a cycle of reactionand post-hoc analysis of those effortsto improve practice. A crisis wouldcall for intervention andhumanitarians respond based onprior experience and best practices.Then, after the intervention has beencompleted, a retrospective analysiswould be done on any informationcollected as part of the work todetermine the effectiveness of theapproaches taken. This form ofanalysis, while easy and inexpensiveto conduct, leads to imperfect data.From a methodological perspective,there is inherent bias in the groupsthat receive the intervention andthose that don't. Also, retrospectivereview doesn't allow collection of theoutcome data that would bestmeasure impact. These outcomemeasures are developed after theproject is complete.

Fortunately, funding bodies arebeginning to support proactiveresearch to develop a body ofevidence based on scientificexperimentation. The majority ofevaluations in the humanitarian fieldrely on case control studies in whichthe intervention is applied to onegroup (case) and not another (control)based on a priori selection. Thismethod allows researchers to pre-determine the outcome measures andthus ensure collection of usable datafor analysis rather than taking whatis available and missing importantinformation that was not collected aspart of the intervention. These casecontrol studies still don't ensure equalcase and control groups and thusthere may be inherent bias. The bestevidence comes from randomselection in randomized controlledtrials. This allows the two groups to

be similar and have an equal chanceat receiving the intervention to studyit's impact.

In many cases, a randomizedcontrolled trial is unethical andshould be avoided. Denying likelybenefits to persons to measure animpact is unjustifiable. In othersituations, RCTs are logisticallydifficult or expensive to implement.The process of creating a registry ofpotential study subjects, randomlyassigning the intervention andcollecting systematic data may be toodifficult in unfamiliar situations orsimply too costly. But in othersituations, when the benefits areuncertain, the risks are minimal andthere are limited resources to applyan intervention, with properoversight and ethical review boardapproval, a randomized control trialis possible and preferred.

The All India Disaster MitigationInstitute (AIDMI) and StanfordUniversity are embarking on such arandomized controlled trial. Withfunding from the HumanitarianInnovation Fund (HIF) by theEnhancing Learning and Research forHumanitarian Assistance (ELRHA)and ethical review by the StanfordUniversity Human ResearchCommittee, a trial is underway to testthe effectiveness and impact of adisaster microinsurance programfrom local market recover amongsmall and micro enterprises (SMEs)at risk of crisis. Updates and outcomeswill be readily available online andyou can track the progress of thisproject with HIF, AIDMI and StanfordUniversity.

– Ronak Patel,Stanford University,

United States

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A small business owner being surveyed in Puri, Odisha.


TOOL

Disaster Insurance, An Effective RiskTransfer Tool for the Most Vulnerable1

An abundance of literaturealready exists around climate

change and its impacts for present andfuture, along with the resultantposition of the most vulnerable - thepoor, the marginalized, and theexcluded. In response, governmentsaround the globe are thinking aboutstrategies for both reducing the causesof climate change and their impact,as well as experimenting with manynew tools in this regard. Risk transferis one such mechanism which enablessharing of risks for the poor.Microinsurance forms a part of risktransfer, but this concept is yet to gainthe desired familiarity andimportance in most of the climate-vulnerable and developing countries.The reasons for this are manifold,ranging from lack of awarenessamong populations, unavailability ofadequate schemes and suitableproducts, high transaction costs, andthe possibility of adverse selectionand the need for initial investment.In India, the situation is also the same,although the importance of such amechanism was largely realized byNational Leaders such as the PrimeMinister and apex financial bodiessuch as the 13th Finance Commission.The current level of insurancepenetration is 3.2% (2012-13), with lessthan 1% in nonlife insurance categories(2012–13) across the country.

All India Disaster MitigationInstitute (AIDMI), being driven byinnovation, experimented with theconcept of microinsurance in disasterprone areas and was the first agencyin India to design a combination oflife and non-life disaster (micro)insurance products for disaster

victims through public insurancecompanies. Through the workundertaken in Odisha, Gujarat, it wasfelt that the impact of such innovationmust be measured in terms ofeffectiveness and results. With thisintent a research study was conductedby AIDMI and the Society for WomenAction Development (SWAD), theagency which implemented thescheme in Odisha.

The study was kept simple and shortin order to address the basic researchquestion of measuring the impact ofthe microinsurance scheme in theaftermath of Cyclone Phailin. Thiscyclone which struck Odisha andAndhra Pradesh in 2013 was used as areal-life case study to measurewhether such an innovation waseffective for the most vulnerablewhen they faced a disaster. Thefindings of this study wereinteresting and eye opening fordifferent stakeholders interested inempowering the poor through riskreduction.

The study broadly had twoparameters with the impact of cyclonePhailin being one, and insurancecoverage post cyclone Phailin beingthe other. As far as the impact of thiscyclone, the study brought to lightsome interesting statistics. Ithighlighted that 99% of therespondents (n=150) were affected bythe Cyclone of which 41% sufferedextensive damages to their shelters.On average, they suffered a loss ofapproximately INR 19, 300(approximately 310 USD) due to thiscyclone. The loss of livelihood hasbeen a significant factor, multiplying

the vulnerability of the affectedpersons. Simultaneously, resourcesavailable for recovery were verylimited and frequently exploitativein nature. The livelihood activitieshad also declined post Cyclone Phailin,which was agreed upon by all of therespondents. The study reflected thatdisasters definitely contribute inintensifying the vicious cycle ofpoverty. However, in this disaster, atleast the selected respondents had anoption in the form of insuranceprotection.

In measuring the insurance coverage,it was found that 51% of therespondents made claims postCyclone Phailin, while 82% of thosewho made claims received theirsettlements (ranging from 1700 INRto 17000 INR – approx 25 USD to 275USD) within 3 months – the periodwhen they particularly neededliquidity to overcome the immediatefinancial requirement for buildingback their lives. It was interesting tosee that 88% of these clientsconsidered the claim process assimple and easy and 99% of them feltthat the existing premium undermicroinsurance was affordable(approximately 170 INR or 3 USD -annually). This study also revealedthat the amount received ascompensation was useful for theclients to meet their immediateliquidity needs in many ways as theyused the money for basic necessitiessuch as repairing of shelter, purchaseof seeds, purchase of medicines,repayment of informal loans takenfrom various sources, amongst otheruses.

1 The article draws on the Humanitarian Research and Innovation Grant Programme by the OCHA Policy Development andStudies Branch of UNOCHA (2014–2015).


For improving the insurance product,the respondents had requested anintegrated product which coveredhealth too. They also suggested afaster settlement process; moreawareness and sensitization actionsat the community level; andextension of the product coverage toall, especially for formal and informalsmall businesses.

The study was useful from manyangles. In terms of learning, it wasuseful for sustenance of a futureproduct as well as for scaling up thecoverage. There are opportunities forall involved, including the poorest ofthe poor in the largest insurancemarket. However, additional analysisand thinking is required to judge anddefine how effective products can benurtured, and how new products canbe developed and introduced. Thereis a need to recognize that the poorhave an inherent desire to rise abovethe poverty line. Any option that iswell structured and presented,presuming it addresses a keychallenge as determined by thebeneficiary, is bound to be a success.This study addressed the primaryresearch question of the impact ofmicroinsurance in post cyclone Phailinas successful, and needs to expand anddevelop particular to smallbusinesses.

The study reflected that for thecyclone Phailin affected households,risk transfer decreases thedependency on aid and offers thepossibility of self-sufficiency andincreased sense of dignity.Considering the damages thatresulted from cyclone Phailin, itwould have been very challenging forlimited income groups who hadsuffered major damage to theirshelters to reconstruct. Additionally,relief and recovery measures fromstate actors take time and may notensure individual coverage for variedreasons. Thus, the insurance productcontributed greatly to building backthe lives of the insured clients. Thisinnovation further justifies the factthat a combination of "push" and "pull"factors can be very effective inensuring mass inclusion to thebenefits at the same time ensuringsustainability and profitability of themarket.

From the study's conclusion, it canbe said that the involvement ofgovernment is crucial given its rolein providing subsidies to poorhouseholds; lawmaking for floodinsurance pool; providing subsidiesto private insurance companies so thatthey become affordable to low-income households; providingreinsurance; encouraging insurance

companies to reach out to at riskcommunities, especially in coastalareas. The government's continuedsupport for this work is cost effectiveand worthwhile as the burden willbe shared among potential actors andvictims.

This study recommended specificactions on the part of variousstakeholders, including increasingawareness amongst the masses;increasing media coverage ofmicroinsurance schemes; moreinvolvement and coordinationbetween government and non-government actors; improvedoutreach and collaboration efforts onthe part of insurance companies;encouragement and scaling-up ofsuch products on the part of thegovernment; promoting research toassess the need for designing aneffective mechanism for encouragingthe development of suchprogrammes at a larger scale. Asworld leaders are in the process offinalising the vision for DRR post-2015 (Post 2015 Framework for DRR/HFA2), the microinsurancemechanism must be positioned as atool to increase resilience amongvulnerable groups. It is time for us toadopt a change to traditionalapproaches.

– Mihir R. Bhatt, AIDMI

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A policy holder of Afat Vimo.


REGIONAL PERSPECTIVES

From Sendai to Dhaka:

How does Sendai Framework forDisaster Risk Reduction

(SFDRR) look from a regionalperspective? And what is the best wayto promote microinsurance within it?

The Institute of Disaster Managementand Vulnerability Studies (IDMVS),University of Dhaka; and DuryogNivaran, the South Asian initiativein Disaster Management organized aRound Table on "From Sendai toDhaka: Regional Perspectives onSendai Framework to Disaster RiskReduction" in Dhaka University onApril 2, 2015. IDMVS is a leading centerof disaster risk reduction initiatives.Dhaka University is one of theimportant universities of South Asia.

The keynote speech was given by Mr.Mihir R. Bhatt, All India DisasterMitigation Institute (AIDMI), Indiaand Chair, Duryog Nivaran. Hewelcomed the SFDRR as well asthanked Margareta Wahlstrom ofISDR and Government of Japan forWorld Conference on Disaster RiskReduction and enlisted areas fordeveloping regional perspectives.This included, the role of newknowledge on risk and the use ofscience and technology for buildingresilience in South Asia. Issues ofregional economic growth,demography, and city levelgovernance came up in discussion.Moderated by Mr. MuhammadTaher, Member of DN, the panel ofdiscussants included Dr. MahbubaNasrin, Director, IDMVS, DhakaUniversity; Ms. Cathrine TranbergHaarsaker of UNDP Bangladesh; Ms.Dilruba Haider, Coordinator, Genderand Climate Change, UN Women,Bangladesh; NGO and civil societyleaders.

Regional Perspectives on Finding Insurance in SendaiFramework for Disaster Risk Reduction

One of the ideas that came up was tolook at the private sector and its rolein reducing disaster risk andpromoting preparedness. Thediscussion covered the idea ofmicroinsurance as a way to reducerisk as well as a way to be prepared.Four areas for action came up at theend which included preparing pilotprojects and programmes in theregion; negotiating risk and how it isor is not covered by new economicdevelopment, physical or other; newand agile instruments to financemicroinsurance sector development;and further integrating DRR andCCA with insurance.

Dr. Mahbuba Nasrin pointed out thepotential of women's leadership inthe region to reduce risks.

Ms. Cathrine Tranberg built on thework of UNDP and suggested "riskinformed" development in theregion. Ms. Dilruba Haider argued forattracting new ideas and energies toaddress the long standingvulnerability of women and theirwork in South Asia. Dr. Soneji ofOxfam called for greater focus ondemographic opportunity to reducerisk in the region.

Discussion focused onmicroinsurance and its use in SFDRR.Need for skills and services to helpdesign microinsurance projects andprogramme was discussed.

It was decided to work out an actionand research road map based on thediscussions.

Accompanied by the Director of IDMVS, Dr. Mahbuba Nasreen (far left) andMuhammad Taher, (second from right), the Mr. Mihir Bhatt (centre right) met theVice Chancellor of Dhaka University, Prof. Arefin Siddique (second left) at his officeon the 2nd of April 2015. Among other issues discussed, they have underscoredthe importance of regional cooperation in South Asia particularly to address thechallenges caused by climate change and the growing risk of disasters. He hasalso endorsed the emerging collaboration between the IDMVS and Duryog Nivaran.


RISK REDUCTION

Disaster Microinsurance for Local MarketRecoveryBusiness enterprises form the

backbone of effective disasterrecovery and reconstruction.Especially small scale and informalbusinesses help in restoring theeconomic fabric of vulnerablecommunities in post disastersituations. However, due to theirinformal nature, such business unitslack access to disaster riskmanagement mechanisms and areoften outside the ambit ofgovernment disaster riskmanagement programmes andschemes. This is particularly true of adeveloping country like India, whosevast informal economy of small scalebusinesses is rendered highlyvulnerable to the debilitating impactsof disasters due to theaforementioned factors. In hisinaugural address at the NationalSummit on Disaster Management,

Mr. M. Shashidhar Reddy (ViceChairman of National DisasterManagement Authority) said thatapproximately 71 per cent of smallindustries/ businesses do not haveany disaster management plan and43 per cent of them never reopen aftera disaster hits them.1

To address the vulnerability of suchsmall scale business units, the AllIndia Disaster Mitigation Institute(AIDMI), University of Stanford andthe Humanitarian Innovation Fund(HIF) have collaborated to launch aproject on piloting disastermicroinsurance for such businessenterprises. Titled Innovating Disastermicroinsurance for Local MarketRecovery, this projects aims to pilotan appropriate disastermicroinsurance scheme in 3 urbansites of India.

1 Shri M Shashidhar Reddy, Vice Chairman, National Disaster Management Authority (NDMA) 2012. Press release"Industries draw their subsistence from community and must contribute to community disaster preparedness". NDMA:New Delhi.

Presently, risk transfer approaches donot find a lot of currency inhumanitarian aid contexts and notmuch is known about the extent towhich micro insurance helps smalland informal business enterprises inreducing disaster induced economiclosses. The rationale behind thisproject is to create an empiricalevidence base for humanitarianagencies, urban authorities andinsurance providers to up take risktransfer issues in their policies andpractice. This will help in mouldingand upscaling risk transferapproaches to better suit the needs ofthe urban poor. Furthermore,various knowledge products and atoolkit will be devised to facilitateeasy replication of this risk transferapproach.

For the purposes of this project, smallscale businesses are defined asinformal and unregistered businessesoperating as street vendors and in-home businesses, by family membersor/and a small local group/sestablished on both residential sitesand local market sites. Thesebusinesses are often without registerin government regulations, lack ofprotection and insecure from crisissituation. These businesses are oftenwithout fixed building structureslocated on business standsdemarcated as such by localgovernment (municipal) townplanning regularities. All thesefeatures make such business unitsextremely vulnerable to the impactsof disasters.

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Mrs. Rupa Rabha, a small food stall owner in GMCH vending zone, Guwahati useda handsome amount from her miger savings to rebuild her make shift stall afterstorms in 2014.


CLIMATE CHANGE

Climate Change Adaptation throughMicroinsurance in Coastal Odisha

The state of Odisha in the IndianUnion is prone to multiple

hazards. Due to its sub-tropicallittoral location, the state is prone totropical cyclones, storm surges andtsunamis. Its densely populatedcoastal plains are the alluvial depositsof its river systems. The rivers in theseareas with heavy load of silt havevery little carrying capacity, resultingin frequent floods, only to becompounded by breachedembankments. Especially the 480 kmcoastline of the state is extremelyprone to cyclones and floods.1

This vulnerability is furtherexacerbated by climate change, which

has thrown open new challenges tothe poor and marginalizedcommunities of the state striving tolead a dignified life in the face of thisnew threat. The occurrence of twomajor cyclones, Phailin and Hudhud in2013 and 2014 respectively beartestimony to the enhancedvulnerability of the Odisha to climatechange.2 While the state'sadministration and its disastermanagement authority did a splendidjob in reducing the death toll fromthese disasters, the financial lossescould not be prevented. WhileCyclone Phailin destroyed cropsworth Rs. 2400 crore, the financiallosses arising out of Cyclone Hudhud

1 Odisha Vulnerability Profile http://www.osdma.org/ViewDetails.aspx?vchglinkid=GL001&vchplinkid=PL0032 Fierce cyclones could be linked to climate change http://www.thethirdpole.net/fierce-cyclones-could-be-linked-to-climate-

change/3 http://www.telegraphindia.com/1141113/jsp/odisha/story_19031670.jsp#.VSYbA_mUeSo

were close to the vicinity of Rs.4,949.38 crore.3 These disasters wereparticularly debilitating to the poorcommunities of coastal Odisha whichwere highly dependent on climatesensitive livelihoods and have littleor no access to risk transfermechanisms. Such poor andvulnerable communities are mostlyinvolved in small scale informal andunregistered businesses operating asstreet vendors and in-homebusinesses, on both residential sitesand local market sites. Thesebusinesses are often without registerin government regulations and in theabsence of risk transfer mechanisms,

Commissioned for a period of 18months, this project is being rolledout in 3 phases. The process ofpiloting the innovation will beinitiated by a demand survey of theneed for disaster insurance with smallbusinesses in the local economies ofall sites. This survey will capture theaspirations and apprehension of thevarious small scale entrepreneursabout disaster-insurance so as toevolve an insurance scheme whichprecisely matches their expectationsand needs. The findings of thisdemand survey will feed intocreating an insurance policy bestsuited to the needs of the targetedgroup. Important aspects of such apolicy such as the premium, timeframe, claim settlement mechanism,etc. will all depend upon the findingsof the demand survey as well asconsultations with relevantstakeholders (such as insurance

companies, partners and the localcommunity).

Once the insurance scheme isformalised, it will be piloted with5000 small business operators in eachof the above mentioned cities. All thesteps of the process of taking thisinsurance scheme will be closelymonitored and a thorough evaluationwill be made of the impact of thisscheme on the insured entities.

Presently, the demand survey in Puridistrict of Odisha with 1500 smallscale enterprises has been completed.The survey in Puri has highlightedsome interesting aspects about theneeds of small business there such asthe migration, mobility andseasonality involved with smallbusiness predicated on religioustourism. These aspects will be takeninto consideration while designing an

appropriate micro insurance schemefor such businesses. Similarly, suchcontextual needs of small businessfrom the other two disaster pronesites will also be taken into accountin devising the final micro insurancescheme.

Other external factors such as rapidurbanization, climate change andeconomic growth will also dictate theevolution of the micro insurancescheme. The hitherto progress of theproject has been encouraging and itis hoped that disaster insurancescheme for small and informalbusinesses could well be thehumanitarian innovation that canhelp engender sustainability andresilience to business enterprise sosorely needed in post-crisissettings.

– Kshitij Gupta, AIDMI


are highly unlikely to recover in postdisaster situations.

Thus, there is a need to promote risktransfer mechanisms among suchsmall scale and informal businessunits to effectively address the riskarising out of climate change anddisasters. Under a project titled,Disaster Microinsurance for Local MarketRecovery, the All India DisasterMitigation Institute (AIDMI) hascollaborated with Stanford Universityand the Humanitarian InnovationFund (HIF) to promote a disastermicroinsurance scheme called AfatVimo for small and informalbusinesses units in three urbanlocations of India. One of theselocations is the Puri district in Odishaand the Society for Women ActionDevelopment (SWAD) is the localpartner helping in promoting theconcept of microinsurance among thepoor and vulnerable communities ofcoastal Odisha. SWAD is a registerednon-government organization basedin the Puri district of Odisha, committedto the cause of development andwelfare of poor women and weakersections of society.

The efficacy and uptake of anymicroinsurance scheme dependsupon the extent to which it is syncedto the needs of its target group. Thus,the first step in piloting thismicroinsurance scheme was toconduct a demand survey about theneeds of the targeted groups to evolvea microinsurance scheme which isbest suited to their needs. Thisdemand survey has already beencompleted in the Puri district ofOdisha and has covered 1550 ownersof such small and informal businessunits. This survey which wasfacilitated by resource persons fromSWAD and AIDMI has revealed somevery interesting information aboutthe targeted client group.

The first interesting highlight wasabout the structure of the business

units covered in this survey. Most ofthe business units covered under thissurvey were permanent fixed shops,fixed stalls, temporary stalls, mobiletrolleys or home basedmanufacturing workshops. This hasgiven a good insight into the patternof mobility and seasonality of thebusinesses that have been surveyed.A large number of the owners of suchbusiness units did not have priorknowledge about the concept ofdisaster microinsurance but were bewilling to adopt such a risk transfermechanism if it meets their premiumpaying capability.

Interestingly, the greatest finding ofthis demand survey has been theprevalence of a knowledge gapamong the respondents of thissurvey. This knowledge gap is furthercompounded by a great level ofmistrust and misunderstandingabout microinsurance among therespondents of this survey. A lot ofthe respondents said that they do nottrust insurance companies nor dothey fully comprehend the concept ofrisk pooling. This knowledge gap andmistrust of microinsurance hasemerged as the greatest barrier to theuptake of the proposedmicroinsurance scheme.

All these findings have been dulynoted and they will feed into theformulation of an appropriatemicroinsurance scheme for thetargeted clients. Before the pilotingof the microinsurance scheme, aconsultation involving theprospective clients of thismicroinsurance scheme will be held.This consultation will involve all thestakeholders of his project and it willhelp in furthering the understandingof the clients about the concept of riskpooling mechanisms to help themovercome issues of mistrust andknowledge gaps.

SWAD's mission is to reduce povertyand improve the quality of lives ofthe poor and vulnerable groups in thePuri district of Odisha. To achieve thismission, we rely on capacitybuilding, promotion of sustainablelivelihoods, greater access to self-governance and basic rights, servicesand needs. By partnering with AIDMIand HIF on this project, we hope toprovide a protective cover to thebusinesses of the poor and vulnerablecommunities of our area so that theymay thrive and prosper even in theface of risks from disasters andclimate change.

– Binapani Mishra, SWAD

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Local adaptation strategy against extreme events in coastal Odisha.


RISK MANAGEMENT

Risk Transfer through Microinsurance:Management of Loss and Damage fromClimatic Stressors

Risk transfer helps societies andindividuals prepare for

catastrophes and mitigate their effectson households and the broadereconomy. A schematic diagramshowing the smoothing effect of risktransfer, reducing the severity of thepeaks while creating a base-line costis given alongside. Furthermore,these instruments put a price tag onrisks and thus create transparency forthe costs of physical preparednessmeasures.1

Risk transfer is undertaken when thepotential loss and damage it couldexperience could be greater than itsability to manage that loss anddamage. In the developed world, risktransfer instruments such as insuranceplay an important role in mitigatingeconomic loss from natural disasters,covering about 30% of economiclosses. In lesser-developed countries,these instruments cover only 1% oflosses (WEF 2011).

Risk transfer is often used to protectlivelihoods of low-income groups atthe micro level. The need is greaterthan ever to reduce and transfer riskfor climate change adaptation andsustainable development. Thus, twokey issues demand attention: first,

1 World Economic Forum (2011); http://www3.weforum.org/docs/WEF_VisionManagingNaturalDisaster_Proposal_2011.pdf

Highlights from World Conference on DisasterRisk Reduction (WCDRR)

Senior government and industry representatives on Disaster Risk Transferand Insurance panel presented on how public-private partnershipapproaches that engage the insurance/reinsurance sector in pricing riskhelp drive efficient DRR and disaster response. They also highlighted thepotential for public-private cooperation to increase disaster insurancepenetration levels and to sustain livelihoods in the wake of significantdisasters. Panel members stressed insurance as a critical part of the DRRagenda that needs greater prominence in the post-2015 framework.Participants called on industry to design insurance products affordable forvulnerable sectors.

For more information and source: http://www.iisd.ca/vol26/enb2611e.html

Effects of risk transfer.

incentivize risk reduction and lossprevention and second, to bridge thefinancial gap when losses occur,delivering climate insurancesolutions that really work forcommunities expose to climateextreme events.

A UNISDR – commissioned study oncatastrophe modelling recommendsfocusing on improving theavailability of economic loss data,cost benefit analyses of measures suchas land-use and urban planning, andthe promotion of risk transfer.

A highlighted in WCDRR (see leftside box) sustainable insurance isessential to achieve a secure society,and also to achieve resilience as aplatform for sustainable growth anddevelopment.

– Vishal Pathak, AIDMI

Insurance minimizes the shock to those affected by disasters, facilitating faster and morerobust recovery.


NEW INITIATIVES IN DRR

Beating the Heat: Building ResilientIndian Cities in the Face of Climate Change

Climate change is fueling higherdaily peak temperatures and

longer, more intense heat waves withincreasing frequency globally as wellas in India. To protect vulnerablepopulations from the dangeroushealth effects of heat stress, a newscale of coordinated disasterpreparedness is essential atmunicipal, state and national levels.

The western city of Ahmedabad hasexperienced its share of intense heatwaves in recent years, with a deadlyheat wave in May 2010 serving as awakeup call to action on disasterpreparedness for heat waves. TheAhmedabad Municipal Corporation(AMC) partnered with the PublicHealth Foundation of India (PHFI),Indian Institute of Public Health –Gandhinagar (IIPH) and the NaturalResources Defense Council (NRDC)to prepare Ahmedabad's localcommunities for increasinglyextreme heat. Together with acoalition of academic, health andenvironmental groups, an earlywarning system and heatpreparedness plan was developed andimplemented, making Ahmedabadthe first city in South Asia tocomprehensively address the healththreats of extreme heat.

As exemplified in Ahmedabad, manysimple adaptation strategies caneffectively help limit the deadlyimpacts of climate-related disasters.For example, through the HeatAction Plan, the city issues publicwarnings when extreme heat days arepredicted and hospitals are notifiedto be on alert for heat-distressedpatients. On those days, additionalwater is tanked in and cool publicspaces are made available for relief

from the dangerous temperatures.Some permanent changes have beenmade too, such as a local hospitalmoving its vulnerable newborn wardto the cooler bottom floor andreplacing its black tar roof withreflective white china mosaic tiles toreduce the temperature within itswards. The coalition has alsoorganized trainings for the mostvulnerable residents exposed to themost intense heat- including slumdwellers, construction workers, ragpickers, street vendors and officialssuch as traffic police officers – tosensitize them to the dangers ofextreme heat.

As the latest IPCC report confirms,the effects of climate change are notlimited to extreme temperatures, andglobal warming is alreadyintensifying other extreme weatherevents in India and elsewhere. As wehave seen, preparing for these eventsbefore they happen not only lessens

the damage that befalls residentswhen disaster strikes, but alsoenhances the recovery forcommunities in the aftermath. Thismodel is saving lives in Ahmedabadand can also be adapted for otherrapidly urbanising cities to preparefor present and future climate-relateddisasters including heat waves,flooding and cyclones.

Building cities resilient to climate-related disasters is necessary toprotect people and help them recoveras the effects of global warmingmagnify natural disasters acrossIndia. Ahmedabad's heat action planoffers a blueprint for how local citiescan prepare for and mitigate theimpacts of not only heat waves, but awhole range of future calamities onits most vulnerable populations.

– Ms. Anjali Jaiswal,Director, India Initiative, NRDC, and

Ms. Nehmat Kaur,NRDC


KNOWLEDGE SHARING

Challenges of Disasters in Pakistan

Historically, Pakistan had beenexperiencing great challenges

of disaster management due to thefrequency and magnitude of naturaldisasters faced during the pre andpost–independence period.

Recently, Pakistan has witnessedgreat earthquakes e.g. Quetta (1935),Hunza, Gilgit/Baltistan (1974) andAzad Kashmir/KPK/Islamabad(2008) side by side Floods/unprecedented torrential rains 1950,1974, 2010, 2011 and Tsunami (1945)and drought Baluchistan (2002).

These are just examples (see table)where great damage to life andproperty was caused due to disasterswhile the challenges of DisasterManagement have been increasingdue to Global Warming and impactof Climate Change.

But how Pakistan has graduallyprepared itself to meet suchchallenges is evident from the gradualprogress in developing policies andsystems to address the disasters. Wesee that Federal and ProvincialDisaster Management Commissionsunder the chairmanship of PM andthe CMs are constituted. NationalDisaster Management Authority hasbeen fully established whichcoordinates all DRR and DRM issueswith the provinces, AJK and GilgitBaluchistan Governments. ProvincialDisaster Management Authorities arealso fully established and functionalwhile District Disaster Managementauthorities are notified/beingestablished and their roles clearlydefined vide Parliament Act 2010.

National Disaster Management Planand National DRR Policy has beenprepared and the National strategiesfor DRR and DRM developed inconsideration of the requirements/vulnerabilities on account of variousHazards and Environmental/Climatic Changes due to GlobalWarming and historical evidence of

disasters in the light of Hyogo framework of Action adopted by UN as wellas the decisions taken internationalconferences organized by UNISDRand other UN agencies. ProvincialDisaster Management Action Plans inthe light of national DRR policy andthe national strategies mentioned inNDMP keeping in view also the

Event / Disaster Location Date Affected DeathToll

Earthquake/ Makran 325 BCETsunami1935 Baluchistan Quetta 31 May 1935 60000Earthquake1945 Baluchistan Makran 27 November 1945 4000EarthquakeFlood 1950 2900Windstorm 15 December 1965 10000Flood August 1973 48000001974 Hunza Northern 28 December 1974 97,000 5,300Earthquake AreasFlood 2 August 1976 5566000Flood June 1977 1022000 10354Flood July 1978 2246000Flood August 1998 1000000Extreme 11 June 1991 961TemperatureFlood 9 August 1992 6184418Flood September 1992 12324024 1334Windstorm 14 November 1993 609Flood 22 July 1995 1255000Flood 24 August 1996 1186131Flood 3 Marh 1998 1000Drought Marh 2000 2200000Earthquake 8 October 2005 2.5 million 78000Flood July/August 2010 20000000Flood August 2011 9275568 497Flood September 2012 4849841 571Flood August 2013 1489063 234Flood August 2014 2.5 million 367Cyclone October 2014

Pakistan’s witnessed great Earthquakes

Source: Wikipedia, Pakistan Disaster Knowledge Network.


lessons learnt in handling previousdisasters and the research studiescarried out through internationalfunding, have been prepared/beingfinalized.

Mainstreaming DRR in thedevelopment strategies has beenmajor focus of the NDMA whileprovision of quick relief to all thevictims/disaster affectees without

any time lag and appropriaterehabilitation of all the affectedpeople keeping in view the physicaland psychological needs of thevictims specially women, children,elderly and the special children is theultimate objective with optimumutilization of available resources in atransparent manner.

The systematic approach towardsaddressing the issues has definitelyimproved response to disasters inPakistan. However, continuedcapacity building, better coordinationand more effective use of media willfurther enhance the responsecapability.

– Ms. Saira Ahmed,Disaster Risk Reduction Specialist,

NDMA, Pakistan

Victoms of the floods of 2014.

Case Study

Dhan Shyam Tale, 52 years old, has been aresident of Puri district since the last 25 years. Due

to poor economic condition he has not able to buy ahouse for himself and lives in a rented kuccha house. Hehas been engaged in a street food stall since 22 years. Hesells different kinds of street food like Bada, Piyaji andSamosa. His shop is made up of metal which is just besidethe famous Gundicha temple of Puri. Usually he earnsaround Rs 4000 per month, however his expenditure isaround Rs 2500. He is famous for his food around hisvicinity. Since his son is also engaged in livelihoodactivity due to which he was able to manage his monthlyfamily budget well.

When Dhan Shyam was asked about insurance he said hewas not aware of it. He had heard about the wordinsurance but he does not know what exactly it is. Hesaid that he has no knowledge about it. He suffered hugelosses during cyclone Phailin. When he was asked aboutdisaster insurance he had no idea of what it was. He hadnever heard this term from anyone. When he wasexplained about the insurance, he said insurance wouldhelp him to recover losses. He won't have to borrowmoney from money lenders to continue his business.There was a need for such an initiative. He wishes tosubscribe to the disaster micro-insurance scheme. He saidhe will be able to pay 100-200 INR half yearly.

Dhan Shyam Tale, Puri, Odisha.

– Neha Agarwal, Odisha


GENDER IN HUMANITARIAN RESEARCH

Victims of Popular Research!

The politics of aid is well known.Aid is sent to places which

require it the most but also to placeswhich are most media covered,exotic, and most exciting. Very often,the focus of media, aid and otherrelief and response efforts are madewhen a disaster strikes rural areas.There's more to do and even more toshow. It is an opportunity toshowcase work and morals.Everybody knows what happened ina remote village in Nagapattinam,Tamil Nadu during the 2004 Tsunami.We know what happened to the socioeconomic status of fishingcommunities there, but whathappened to the that ordinary familyof four–the father a driver, mother amaid, children who go to municipalschools? What about their socio–economic status? Did their girl go toschool after the Tsunami?

Natural disasters are commonlyviewed as great equalizers,indiscriminate forces that hit alike.But in reality, when disasters hit,relief is directed to the richer and

media–popular sections of thesociety. Moreover, in urban areas, thedivide is greater, and the poor remainneglected. An urban girl is thatunknown whose life in and after adisaster has remained un-researchedand un–documented.

In cities, particularly, in the poorersections, the fight is tough. Alongwith the pressure of the gender comes

Girls from Shindewadi Slum, Dadar, Bombay, after a funfilled session on Being a girl!

the added burden of poverty.Although there is greater socialmobility, the social support availablein cities is less. Girls who do not goto schools and are in a hand to mouthcondition are at the receiving end ofthe disaster. The lack of shelters,resources and social support in theaftermath of the disaster leaves thesegirls with little protection to threatssexual exploitation in relief camps orotherwise. Studies contain innumerablestories of rape, sexual harassment,sexual favours, early marriages,unwanted pregnancies, STDs etc.

However this still remains a largelyignored area of study, the lack ofstudies available around this isevidence of the lack of importancegiven to this section. Women andmen experience disasters differently,so has been stated in numerousarticles and reports. What remainsun–captured is the differentiatedimpact on GROWN UP women andYOUNG girls and more so betweenurban and rural areas! In our researchefforts more space needs to be devotedto examine how disasters affect girlsspecifically in urban areas.

– Meghna Goyal,Research Assistant, TERI (The Energy

and Resources Institute), New Delhi

Women and girls interacting in Shindewadi, Dadar, Mumbai during a mentoringsesion on Being a girl!


Editorial Advisors:

Anshuman SaikiaRegional Programme Support CoordinatorARO, IUCN (International Union for Conservation ofNature), Thailand

Denis NkalaRegional Coordinator, South-South Cooperation andCountry Support (Asia-Pacific), United NationsDevelopment Programme, New York

Ian DavisVisiting Professor in Disaster Risk Management inCopenhagen, Lund, Kyoto and Oxford BrookesUniversities

Madhavi Malalgoda AriyabanduInternational Strategy for Risk Reduction (ISDR) –South Asia, Sri Lanka

Mihir R. BhattAll India Disaster Mitigation Institute, India

Dr. Satchit Balsari, MD, MPHThe University Hospital of Columbia and Cornell,New York, USA

T. Nanda KumarChairman, National Dairy Development Board(NDDB), Anand, Gujarat, India

ALL INDIA DISASTER MITIGATION INSTITUTE411 Sakar Five, Near Old Natraj Cinema, Mithakhadi Railway Crossing, Ashram Road,Ahmedabad–380 009 India. Tele/Fax: +91-79-2658 2962E-mail: [email protected], Website: http://www.aidmi.org, www.southasiadisasters.net

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This issue of Southasiadisasters.net has been produced under the project ‘Innovating Disaster Micro-Insurance forLocal Market Recovery’. This project is supported by the Humanitarian Innovation Fund, a programme managed by

ELRHA (Enhancing Learning and Research for Humanitarian Assistance). AIDMI is delighted to receive generous supportof Humanitarian Innovation Fund towards this issue.

The Humanitarian Innovation Fund (HIF) is a non-profit grant making facility supporting organisations andindividuals to identify, nurture and share innovative and scalable solutions to the challenges facing effectivehumanitarian assistance. Visit www.humanitarianinnovation.org for more information.

The Humanitarian Innovation Fund is managed by ELRHA (Enhancing Learning and Research for HumanitarianAssistance), in partnership with ALNAP (Active Learning Network for Accountability and Performance inHumanitarian Action). ELRHA is hosted by Save the Children UK. Visit www.elrha.org for more information.

The Humanitarian Innovation Fund is co-funded by UK and Canadian aid from the UK Department forInternational Development (DFID) and the Canadian International Development Agency (CIDA). The viewsexpressed in this document are not necessarily those of DFID, or CIDA.

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