Closing the protection gap: tools to use before they're needed

Recent natural disasters show the cost of these events in terms of lives and more. Our new publication Disaster risk financing: Smart solutions for the public sector highlights tools governments and other organisations can use to protect not just communities, but the people who live in them, before a catastrophe strikes.

Experts are calling it a "once-in-a-thousand-year" flood. But the citizens of the US state of South Carolina are calling it something else: a disaster.

According to reports as of this writing, 11 lives have been lost in some of the worst flooding that has hit the state in recent history. "This is dangerous. This is very real," Governor Nikki Haley told reporters at a news conference last week.

What's real in South Carolina is also real in the south of France. Provence also experienced flash flooding on 3 October that left 16 people dead and massive damage. Reports say that over 17 cm of rain fell in two hours.

Smart solutions for the public sector

While we don't yet know the full impact of these recent weather events, we do know that recovery will take time – and money. That's a big issue nowadays as disaster risks are on the rise, but insurance hasn't kept up the pace. This means that the gap between economic and insurance losses is widening. Today it stands at USD 1.3 trillion in total over 10 years.

On average, only 30% of disaster losses have been covered by insurance. That leaves 70% to be covered by governments, businesses, and you.

Our new publication Disaster risk financing: Smart solutions for the public sector, highlights ways the insurance industry can help ease this burden.

What's in your risk management toolbox?

Usually governments seek funds after a natural disaster, a practice that can trigger higher taxes and borrowing, which can lead a community or country further into debt. Rating agency Standard and Poor's even says that a country's credit disaster preparedness could have an impact on its credit rating.

But there are tools in place that can help prepare communities bounce back. Innovative risk-transfer programmes ranging from macro-level solutions for countries to regional pool programmes for groups of countries that face similar risks. There are also tools for subnational institutions and NGOs to help shore up resilience.

We detail these solutions and offer case studies where they've been applied in Disaster risk financing: Smart solutions for the public sector. You can download the publication, along with fact sheets showing how our innovative solutions have worked in real life, here.

Published 7 October 2015

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