Annual Report 2013 Inroads to Resilience / 25
Insuring Businesses, Homes, and Farmers In FY13, GFDRR through grants and advisory support helped countries strengthen their insurance sector to better protect businesses, homes, and livelihoods. GFDRR contributed to improving domestic insurance markets in a number of countries. Albania now has earthquake and flood insurance risk models and hazard maps that will help the government better regulate insurance companies and banks. Similarly, GFDRR funding and technical advice is helping the governments of the former Yugoslav Republic of Macedonia and Serbia to improve the financial resilience of local insurance markets in response to catastrophic events.
Agricultural insurance has also been a focus for GFDRR. In Guatemala, weather and agricultural statistics are now available to insurance companies as a result of GFDRR support. In addition, the government is creating a public and private sector strategy for agriculture insurance that aligns the Ministry of Agriculture’s policies with that of insurance companies and rural banks. GFDRR provides continued technical support to reform the National Agricultural Insurance Scheme in India, which, together with its successor schemes, has insured more than 29 million farmers. In FY13 alone, the scheme covered more than 1.1 million farmers while another 11.6 million farmers and $370 million worth of crops were covered through the Weather-Based Crop Insurance Scheme.
$45 million of earthquake, tsunami, and tropical cyclone risk coverage was accessed by five Pacific island countries, thanks in part to GFDRR support.
Protecting National Economies Last year, GFDRR—through grants and its Disaster Risk Financing and Insurance Program, which provides advisory support—continued working with governments to accurately assess their disaster exposure and set up systems to protect their fiscal balance in times of crisis. This past year saw the launch of GFDRR’s Pacific Catastrophe Risk Insurance Pilot, which allowed five Pacific island states to access market-based catastrophic risk insurance solutions for the first time. With grant funding for premium subsidies and technical assistance from the government of Japan, the Marshall Islands, Samoa, the Solomon Islands, Tonga, and Vanuatu have secured $45 million of earthquake, tsunami, and tropical cyclone risk coverage from international insurance markets for the 2013 pilot period. The pilot is an important part of the Pacific Catastrophe Risk Assessment and Financing Initiative, a broader GFDRR-supported effort to help the Pacific region develop a comprehensive program on disaster risk management and climate change adaptation.
GFDRR also worked with Pakistan’s Ministry of Finance and its National Disaster Management Agency to develop a preliminary country disaster risk profile needed to create a national disaster risk financing strategy. This work represents an unprecedented level of government interest and action on financial protection. The World Bank completed a feasibility study—supported by a GFDRR grant—on the establishment of a pan-African facility to financially manage drought risk in a region that is debilitated year after year by this natural hazard. The study takes into account the potential legal and financial structures for a facility allowing countries to pool and manage drought risk regionally. It also included financial modeling of various proposed scenarios of country participation and risk financing strategies, and helped support dialogue among stakeholders during the early design stages of the facility.