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

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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

Hurricane Ivan – Grenada 2004

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

• ffer full coverage at the lowest

possible cost.

Vietnam

• Sovereign DRFI
• Subnational DRFI
• Public Asset Insurance

Philippines

• Sovereign and Subnational DRFI
• Contingent Financing and Risk Transfer
• Public Asset Insurance
• DRF for Scalable Social Protection

Pacific Islands

• PCRAFI Insurance Program
• Pacific Resilience Program

Lao PDR Sovereign DRFI Myanmar Sovereign DRFI Cambodia Sovereign DRFI Indonesia

• Sovereign DRFI
• Public Asset Insurance

World Bank’s DRF engagements in Asia

Pakistan

• National and

Subnational DRFI

• Post-disaster

Cash Transfer India

• Agricultur

al Insurance Sri Lanka

• Sovereign DRFI
• Contingent

Financing Bangladesh

• Agricultural

Insurance

• Sovereign

DRFI Nepal

• Earthquake

Recovery and Reconstructi

• n

Comprehensive Strategies Political Economy Private Sector

Catastrophe Risk Financing: Reducing the Contingent Liability of the State?

Private Sector Public Sector

FONDEN – RISK FINANCING STRATEGY

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Source: Holfiger, Mahul, Ghesquiere, et all, 2012

RISK FINANCING STRATEGY IN THE PHILIPPINES

Sovereign Risk Transfer for budget protection

Insurance of public assets

Contingent Financing

National / Local Disaster Risk Reduction and Management (DRRM) Funds

Risk transfer for subnational governments World Bank CAT DDO ($500M) and JICA SECURE ($500M exhausted) contingent credit line for immediate liquidity Explored catastrophe risk transfer embedded within WBG lending to protect against highest layers of risk Joint Catastrophe Risk Insurance Facility for Provinces (Under preparation) Insurance of public assets Insurance for homeowners and small business Reform to allow use

• f disaster fund for

insurance premiums for line agencies Property catastrophe risk insurance pool with private sector and WB/IFC support (under preparation)

THE POLITICAL ECONOMY OF FINANCIAL PROTECTION

Co-benefits Political Economy Trust and Transparency

SEADRIF

ASEAN ASEAN + + 3

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Partnering with the Private Sector