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Building Resilience Against Disasters

ADB Asian Development Bank FIGHTING POVERTY IN ASIA AND THE PACIFIC wwW.ADB.ORG BUILDING RESILIENCE AGAINST DISASTERS 1970-2010: 1.7 MILLION HAZARD-RELATED DEATHS IN THE ASIA-PACIFIC REGION 51% OF GLOBAL TOTAL ANNUAL COST OF DISASTERS: $53.8 BILLION DIRECT PHYSICAL LOSSES FROM DISASTERS ARE FOLLOWING A GRADUAL UPWARD TREND GROWTH IN DIRECT PHYSICAL LOSSES IS OUTPACING REGIONAL GDP GROWTH Total losses $ million 1,089,588 957,964 482,011 428,107 400,773 261,106 68,996 104,268 1980 1936 1991- 3896 1970 1990 2000 2010 2000 I Asia & the Pacific I Global - GDP ... Disaster losses Fitted loss curve DEVELOPING ASIA IS LAGGING BEHIND IN DISASTER RISK INSURANCE Australia Rep. of Korea I People's Republic of China I India I Indonesia I Japan New Zealand Philippines I Taipei,China Share of limit Share of premium THE AMOUNT OF UNINSURED LOSSES IN THE REGION CONTINUES TO GROW I Economic loss I Insured loss '91 92 93 '94 95 96 '97 '98 99 '00 01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 ASIA'S NEED FOR URBAN DISASTER RISK MANAGEMENT PERCENTAGE OF ASIA'S POPULACE LIVING IN URBAN AREAS BY 2020... OVER 70% OF THE REGION'S GDP 13 OF THE WORLD'S 25 MEGACITIES WILL BE IN ASIA & THE PACIFIC 40% 155% IS DERIVED FROM CITIES Many of Asia's major cities have been established in some of the most hazardous locations possible 2010 2030 MOST ASIAN CITIES LACK EFFECTIVE WASTEWATER TREATMENT SYSTEMS MORE THAN TWO-THIRDS OF COLLECTED SOLID WASTE IS NOT DISPOSED OF PROPERLY A RANGE OF FINANCIAL INSTRUMENTS EXISTS TO DEAL WITH DIFFERENT DEGREES OF RISK REVERSING THE LOSING TREND More frequent + + Less frequent High sevěrity International donor assistance The losses from disasters that Asia and the Pacific region has witnessed over the past several decades are not inevitable, and this trend can be reversed if significant investments are made to strengthen disaster resilience, according to a report by the Asian Development Bank. Catastrophe bonds and other insurance linked securities Risk transfer Insurance/reinsurance Contingent credit Risk retention Low severity Reserves/calamity funds (potentially insurance backed) On" Once in Once in U50 Once in 5-100 Investing in Resilience vears and beyond years years years years EXPECTED RETURN PERIOD Emcing a Disske Reia Fe GOVERNMENTS CAN PLAY A KEY ROLE IN DISASTER RISK FINANCING (DRF) I Take ownership of disaster-related public contingent liability. I Provide leadership in the development & implementation of comprehensive DRF strategies. I Provide an enabling legal and regulatory framework to support a stable and solvent risk transfer market. "Asia's economic gain is being eroded by disasters, often hitting the poorest hardest. As the global region most vulnerable to climate change, we no longer have a choice but to focus on disaster risk management." -ADB Vice President Bindu Lohani I Establish preconditions for ensuring access to quality reinsurance, such as a system of risk-based premium, sound capital requirements, and rigorous insurance regulation and enforcement. I Undertake legislative reforms and policy changes, where required, that would allow local government to exploit DRF opportunities. I Provide institutional leadership to establish common methodologies, definitions, and metrics for assessing exposure and losses. I Provide public goods, such as hazard data and risk models, to reduce start-up costs in DRF product development. I Collect and maintain accurate data on disaster relief, early recovery, and reconstruction expenditure; on disaster risk; and on public responsibilities in the event of a disaster to inform annual reassessment of public contingent liability. I Adopt a liberal system for cross-border data collection and sharing. I Engage with the private sector and international community to share data, draw on technical expertise, and leverage resources. I Encourage the development of domestic credit and export credit insurance capacity. I Formulate public policies that stimulate demand for insurance products-for example, enhancing financial literacy and risk awareness, and making commercial and property loans conditional on insurance of assets. SOURCES • ADB (2013) Investing in Resilience: Ensuring a Disaster-Resistant Future • Fast Facts: Vulnerable Cities - Waking Up to the Need for Urban Disaster Risk Management http://www.adb.org/features/fast-facts-vulnerable-cities-waking-need-urban-disaster-risk-management

Building Resilience Against Disasters

shared by AsianDevelopmentBank on Jan 31
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Human and financial losses from natural disasters are rising fast in the Asia and Pacific region. While most Asian countries have disaster handling capabilities, few have adequate provisions for finan...

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