Disaster Risk Financing and Insurance, Phase III
SECO is partnering with the World Bank to implement the Disaster Risk Financing and Insurance (DRFI) Program. The Program supports SECO priority countries in building their financial resilience to natural disasters and other crisis, including pandemics.
SECO priority countries are significantly exposed to natural disasters and other crisis, which often translate into large and unexpected financial burdens for government budgets. The DRFI Program helps countries understand their risk exposure and develop and implement strategies to protect their scarce public finances against these risks. This includes risk-transfers to international insurers as well as the development of national insurance markets. The Program also helps assuring that funding is channelled efficiently to the vulnerable people affected by a disaster.
Support SECO priority countries to strengthen their financial resilience against disasters, climate shocks, and other crises.
Governments have improved financial planning for responding to disasters, climate shocks, and other crises, as measured by the increase in number of countries with: i) DRFI strategies- ii) disaster-reserves in the national budget- iii) pre-arranged finance in place for disaster response.
Local financial markets have strengthened capacity to reduce financial protection gaps from disasters and other crises, as evidenced by the number of: i) countries that have market-based risk finance products- ii) countries where the financial protection gap has been reduced, and- iii) providers of risk finance products.
Households and businesses have increased access to finance post disasters, climate shocks, and other crises, as demonstrated by: i) the amount of disaster response finance channeled through bespoke disbursement mechanisms- ii) number of people registered in social protection systems, and- iii) number of insurance companies that make payouts though e-money accounts.
Economic and fiscal catastrophe risk profiles.
Value for money assessments.
Climate risk assessments for the financial sector.
Design of risk finance products.
Diagnostics to inform laws and regulations on domestic risk finance market development.
Prototype disaster risk financing instruments (e.g., contingent credit facility, insurance).
Number of people that have accessed capacity building programs on DRFI.
Insurance claims performance evaluations.
Design of financing solutions for shock-responsive systems.
Global studies, fellowship scheme, knowledge events.
Global policy dialogue in G7, G20, InsuResilience Global Partnership and other fora.
Results from previous phases:
The second phase of the DRFI Program (2016 - 2022) was assessed through an external evaluation in 2021. The evaluation rated the Program highly satisfactory, especially in terms of relevance and effectiveness, with significant results achieved. These include, among other:
Contributions to the design and implementation of a USD 1.3bn earthquake CatBond for Colombia, Peru, Chile and Mexico. In Peru, the CatBond disbursed USD 60 million after the 2019 earthquake.
Insurance of public assets in Colombia, including more than USD 40 billion of road infrastructure.
Establishment of a Solidarity Fund for Catastrophic Events in Morocco. The Fund is a public funding mechanism that provides coverage to the uninsured and most vulnerable of households.
Introduction of mandatory catastrophe risk insurance for car-, home- and business owners in Morocco, leading to 7 million people newly insured.
All Program countries, except the 5 that recently joined the program, have developed DRFI strategies.
|Directorate/federal office responsible
|Current phase Swiss budget CHF 8’000’000 Swiss disbursement to date CHF 0 Budget inclusive project partner CHF 95’000’000
|Phase 3 01.05.2022 - 30.04.2027 (Current phase) Phase 2 01.12.2016 - 31.12.2021 (Active) Phase 1 01.07.2010 - 31.12.2015 (Active)