Effective Disaster Risk Management for Sustainable Development Catastrophe Risk Insurance: Key Challenges and Opportunities - Project Dissemination Workshop Sofia, Bulgaria, May 27, 2008 Margaret Arnold, ProVention Consortium
What is ProVention? The ProVention Consortium is a global network of international development and humanitarian organizations, governments, the private sector, civil society organizations and academic institutions dedicated to increasing the safety of vulnerable communities and to reducing the impacts of disasters in developing countries.
Who are the partners? Donor governments committed to supporting disaster risk reduction (UK, Norway, Switzerland, Canada, Sweden ) International Financial Institutions (World Bank, Regional Development Banks) International development and humanitarian organizations (OAS, IFRC ) UN agencies (UN/ISDR, UNDP ) Academic institutions NGOs and Grassroots organizations Private sector (Munich Re, Swiss Re )
Background Launched in 2000 by the World Bank in response to: Increasing frequency and severity of disasters; social, economic and environmental impact on the poor; Growing awareness of the link between disasters, vulnerability, poverty and development; Need for a more collaborative approach in the field of disaster risk management. Secretariat is hosted at the International Federation of Red Cross and Red Crescent Societies (IFRC) in Geneva (2003-2010).
ProVention approach ProVention Approach Strategic Objectives Characteristics Innovation Research & Learning Risk Transfer & Private Sector Managing Knowledge Reducing Risk in Recovery Improving Practice Mainstreaming Promoting Policy Risk Analysis and Application Forging Partnerships Thematic Priorities Flexibility Informality Inclusiveness Independence Risk Reduction Initiatives
Risk Accumulation Vicious spirals of disaster risk and development failure Failed Development Source : DFID Disaster risk reduction: a development concern, http://www.dfid.gov.uk/pubs/ files/drr-scoping-study.pdf Disaster Losses
Risk reduction Virtuous spirals of risk reduction Source : DFID Disaster risk reduction: a development concern, http://www.dfid.gov.uk/pubs/ files/drr-scoping-study.pdf Development Appropriate emergency response and reconstruction
Terminology Timeline EMERGENCY RESPONSE----PREPAREDNESS--------DISASTER MGMT------DRM------DRR------------CC ADAPTATION
Disaster Risk Reduction The development and application of policies, strategies and practices to do everything possible before a disaster occurs to protect lives, limit damage and strengthen the capacity of communities and society to recover quickly.
DRR as a cross-cutting issue
Hazards x Vulnerability=Risk VULNERABILITY: The conditions determined by physical, social, economic, and environmental factors or processes, which increase the susceptibility of a community to the impact of hazards. RISK: The probability of harmful consequences, or expected losses resulting from interactions between natural hazards and vulnerable conditions.
Components of DRM Risk identification: understand the problem Hazard maps; community vulnerability and capacity analysis; risk modeling, understanding direct, indirect, and secondary effects of disasters; quantifying social and env impacts Risk mitigation: do the needful to reduce potential impacts ex ante (including Structural and non-structural mechanisms: e.g. land use planning; structural design and construction practices; building codes; public education; early warning systems; preparedness and response plans preparedness and pre-disaster recovery planning) Risk financing: for the risk you cannot eliminate Self insurance; safety nets; informal mechanisms; insurance; catastrophe bonds; contingency financing; calamity funds, micro-insurance
Risk financing Reactive Diversion of domestic budgets and intl aid from development goals Insufficient Poorly targeted Inefficient slow to arrive and disburse Proactive (ex ante) Part of good governance Immediate liquidity Relief of fiscal burden Potential to promote risk mitigation
Challenges of insurance in emerging markets Market gaps Lack of regulatory frameworks Lack of data to price risk Lack of culture of ex ante risk financing Challenge of reaching the poorest
Preventable Losses (2004) Recommendations for Bulgaria Conduct a detailed risk assessment to determine the loss potential, risk distribution, and burden on the central budget of natural disasters, and develop a risk financing strategy for catastrophic events. Based on the findings of the risk assessment, develop an emergency preparedness and risk mitigation program, in particular for the Sofia region. Enhance the mitigation planning and programming capability. Conduct a full assessment of the risks at the Kozlodui nuclear plant, and identify and implement risk mitigation measures. Conduct a national assessment of the landslide risk, and develop a national mitigation strategy for landslides and other hazards. Improve water observation activities and reporting. Upgrade river regulation and flood protection infrastructure. Conduct a dam safety assessment, and make repairs where needed. Invest in modern monitoring and early warning technologies where appropriate.
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