Practice Manager Urban Development and Disaster Risk Management - PowerPoint PPT Presentation

From CCRIF to SEADRIF: WB’s efforts in developing Cat pool solutions and lessons learned Francis Ghesquiere Practice Manager Urban Development and Disaster Risk Management East Asia & Pacific Region World Bank Group 0

Hurricane Ivan – Grenada 2004 Main challenge of Small Island States: ➢ Limited capacity to establish reserves ➢ Limited capacity to spread risk  geographically due to their small size  over time due to high debt levels ➢ Limited access to insurance/reinsurance 1

The Caribbean Catastrophe Risk Insurance Facility (CCRIF) A joint reserve mechanism that allows Caribbean Governments to access liquidity at short notice in case of a major earthquake or hurricane: • quick disbursing within two weeks; • transparent rules parametric instrument; • without cross subsidies contributions are based on each island’s specific risk; • leveraging the financial markets to complement own reserve and offer full coverage at the lowest possible cost.

World Bank’s DRF engagements in Asia Nepal - Earthquake Recovery and Reconstructi on India Pakistan - Agricultur - National and al Subnational Insurance Bangladesh Lao PDR DRFI - Agricultural Sovereign DRFI - Post-disaster Insurance Vietnam Cash Transfer - Sovereign - Sovereign DRFI DRFI - Subnational DRFI - Public Asset Insurance Sri Lanka Myanmar - Sovereign DRFI Sovereign DRFI - Contingent Philippines Financing - Sovereign and Subnational DRFI Cambodia - Contingent Financing and Risk Transfer Sovereign DRFI - Public Asset Insurance - DRF for Scalable Social Protection Indonesia - Sovereign DRFI - Public Asset Insurance Pacific Islands - PCRAFI Insurance Program - Pacific Resilience Program

Private Sector Political Economy Comprehensive Strategies

Catastrophe Risk Financing: Reducing the Contingent Liability of the State? Private Public Sector Sector

FONDEN – RISK FINANCING STRATEGY Source: Holfiger, Mahul, Ghesquiere, et all, 2012 6

RISK FINANCING STRATEGY IN THE PHILIPPINES Property catastrophe Joint Catastrophe Risk risk insurance pool with Explored catastrophe risk transfer Insurance Facility for private sector and embedded within WBG lending to protect Provinces (Under WB/IFC support (under against highest layers of risk preparation) preparation) Sovereign Risk transfer Insurance for for Risk Transfer Insurance of homeowners Insurance of public assets for budget subnational public assets and small protection governments business World Bank CAT DDO ($500M) and JICA SECURE Reform to allow use ($500M exhausted) of disaster fund for Contingent Financing contingent credit line for insurance premiums immediate liquidity for line agencies National / Local Disaster Risk Reduction and Management (DRRM) Funds

THE POLITICAL ECONOMY OF FINANCIAL PROTECTION Trust and Transparency Political Economy Co-benefits

SEADRIF ASEAN ASEAN + + 3

Partnering with the Private Sector 10