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Disaster management

Disaster risk and climate threats: Taking action to create better financial solutions

Olivier Mahul's picture

As the people of Vanuatu begin the painstaking task of assessing the damage to their homes, businesses, and their communities in the wake of Cyclone Pam, another assessment is underway behind the scenes.

Given the intensity of the category 5 storm and the reports of severe damage, the World Bank Group is now exploring the possibility of a rapid insurance payout to the Government of Vanuatu under the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI). 

The Pacific catastrophe risk insurance pilot stands as an example of what’s available to protect countries against disaster risks. The innovative risk-pooling pilot determines payouts based on a rapid estimate of loss sustained through the use of a risk model. 

The World Bank Group acts as an intermediary between Pacific Island countries and a group of reinsurance companies – Mitsui Sumitomo Insurance, Sompo Japan Insurance, Tokio Marine and Nichido Fire Insurance and Swiss Re. Under the program, Pacific Island countries – such as Vanuatu, the Cook Island, Marshall Islands, Samoa and Tonga – were able to gain access to aggregate risk insurance coverage of $43 million for the third (2014-2015) season of the pilot. 

Japan, the World Bank Group, and the Secretariat of the Pacific Community (SPC) partnered with the Pacific Island nations to launch the pilot in 2013. Tonga was the first country to benefit from the payout in January 2014, receiving an immediate payment of US $1.27 million towards recovery from Cyclone Ian. The category 5 cyclone hit the island of Ha’apai, one of the most populated of Tonga’s 150 islands, causing $50 million in damages and losses (11 percent of the country’s GDP) and affected nearly 6,000 people.

Globally, direct financial losses from natural disasters are steadily increasing, having reached an average of $165 billion per year over the last 10 years, outstripping the amount of official development assistance almost every year. Increasing exposure from economic growth, and urbanization—as well as a changing climate—are driving costs even further upward. In such situations, governments often find themselves faced with pressure to draw funding away from basic public services, or to divert funds from development programs.


Investing in Innovative Financial Solutions

The World Bank Group and other partners have been working together successfully on innovative efforts to scale up disaster risk finance. One important priority is harnessing the knowledge, expertise and capital of the private sector. Such partnerships in disaster risk assessment and financing can encourage the use of catastrophe models for the public good, stimulating investment in risk reduction and new risk-sharing arrangements in developing countries.

The Caribbean Catastrophe Risk Insurance Facility (CCRIF) is another good example of the benefits of pooled insurance schemes, and served as the model for the Pacific pilot. Launched in 2007, this first-ever multi-country risk pool today operates with sixteen participating countries, providing members with aggregate insurance coverage of over $600 million with 8 payments made over the last 8 years totaling of US$32 million. As a parametric sovereign risk transfer facility, it provides member countries with immediate liquidity following disasters.

We also know that better solutions for disaster risk management are powered by the innovation that results when engineers, sector specialists, and financial experts come together to work as a team. The close collaboration of experts in the World Bank Group has led to the rapid growth of the disaster risk finance field, which complements prevention and risk reduction. 
 

The story of one thousand earthquakes

Saurabh Dani's picture
In early 2014 I saw a video circulated by a colleague, wherein someone from Japan had put together all the earthquakes that struck Japan between January 2011 to September 2011, essentially capturing the early tremors, the Great Tohoku earthquake of March 11, 2011 and subsequent aftershocks. It was a compelling visual which brought home the sheer intensity of the earthquake event. While the video was a visual representation of an event, could the same concept be used to create a product that could become a tool for raising awareness to a serious issue?
 
The Story of One Thousand Earthquakes
Over a one-year period from May 2013 to May 2014, there were a total of 1,247 recorded earthquake events of 4.0 magnitude or higher. It's time to get prepared.
 

With over 600 million people living along the fault-line across the Himalayan belt, South Asia’s earthquake exposure is very high. To further compound the problem, South Asia is urbanizing at a rapid pace and a significant growth in mega-cities, secondary and tertiary cities / towns is happening in high risk seismic zones. The region has experienced three large events over the past 15 years, the Bhuj earthquake of 2001, the Sumatra earthquake of 2004 (leading to the Asian tsunami) and the 2005 Kashmir earthquake. While there have been no major earthquakes these past 9 years, the region is akin to a ticking bomb for an earthquake disaster. Keeping this in mind, we mapped a region of 3000 Km radius from the center of India and analyzed earthquake events over a one-year period from May 2013 to May 2014. Only those earthquakes recorded by the United States Geological Survey’s global earthquake monitoring database (USGS) greater than 4.0 magnitude on the Richter scale were considered. We found a total of 1,247 recorded earthquake events. The story of a 1000 earthquakes was born and was a story that needed to be told.

We decided to create a video that would become an awareness tool and effectively communicate the risk the region faces. We deliberately steered away from talking about work being undertaken to reduce seismic risks or policy mechanisms that can be adopted. There are other mechanisms, mediums and opportunities to take that agenda forward. This is a short 90 seconds video and hopefully communicates the urgency of investing resources and efforts into earthquake safety. Increase the volume, enjoy, get scared. and then be prepared!

Sustainable Development Gains Require Greater Climate and Disaster Resilience

Rachel Kyte's picture

 Richard Whitcombe/Shutterstock

Average economic losses from natural disasters are rising, despite considerable efforts to better manage risk from natural hazards over the last few decades. Data from Munich Re shows a sharp rise, from $50 billion a year in the 1980s to just under $200 billion annually in the last decade. Population growth, rapid urbanization, and climate change are compounding these losses. Securing prosperity in the midst of growing hazards is an enormous challenge that demands a new approach to development.

The international community is rising to meet this challenge head-on. Last week in Oslo, Norway, I had the privilege of participating in the 15th Consultative Group Meeting for the Global Facility for Disaster Reduction and Recovery (GFDRR), where 75 representatives from partner countries and international development organizations met to help scale up and better mainstream efforts to build climate and disaster resilience in some of the most vulnerable communities around the globe.

With the importance of this effort in mind, I co-authored an article with Norwegian Minister of Foreign Affairs Børge Brende, in which the minister and I argue that sustainable development gains require a new approach towards mitigating risk from climate change and natural hazards. After the recent days spent with my colleagues in Norway, I’m encouraged by the shared enthusiasm of GFDRR and its partners for the task ahead. It’s time to get to work.

Thailand after the floods: When communities own their change

Flavia Carbonari's picture

In 2011, Thailand suffered the worst floods in half a century. The flood crisis impacted more than 13 million people. About 97,000 houses were damaged and entire villages and cities were under water for months.

House in Ayutthaya affected by the 2011 floods
House in Ayutthaya affected by the 2011 floods

Three years later, Thailand has been able to deal with the worst of the impacts but some of the poorest households are still struggling to recover. We visited 10 affected communities in Ayutthaya and Nakhon Sawan as part of the supervision of the Community-based Livelihood Support for Urban Poor Project (SUP). We could still see the water marks on their walls, damaged ceilings, and wobbly structures. The unrepaired houses stuck out but just as striking was the strong sense of community in the area. We were reminded that villagers came together to overcome the worst natural disaster most of them ever witnessed in their lives.

The flooding led to better disaster risk management in the neighborhoods  that are most at risk. Local governments have taken the lead. But the disaster has also, just as importantly, mobilized ordinary citizens in some of the most deprived communities. Here are some of their stories:

'This is our house now'

Onno Ruhl's picture


In Unit #95 (Photo: Martje van der Heide)

“This is unit number 95”, Preeti told me. “It is the standard model.” Geeta Devi the owner shook her head. “Look up”, she said, “This is our house.” I looked up and saw what she meant: there was a beautiful lotus flower design in the ceiling. “My husband made it” Geeta said proudly. “This is our house”.



The tireless Preeti works with village communities to help them build back better (Photo: Martje van der Heide)

Preeti Bisht is the community worker for SUDHA who is mobilizing the victims of the Uttarakhand floods in this small village on the Mandakini River, well on the way to Kedarnath. She took me all the way to unit number 107 and in passing showed me the school. I soon discovered that none of the house units were standard. Some people added a room, others an extra window in the kitchen to show the amazing view up river. And the houses that were already finished were painted in every color imaginable as houses in Uttarakhand are meant to be.

We’re Putting Climate and Disaster Risks in Focus

Jane Ebinger's picture

 Scott Wallace/World Bank

Strengthening disaster and climate resilience must become an integral part of our development work. With global temperatures continuing to rise, we know that volatile and extreme weather events will become more frequent, and that poor and vulnerable populations will be most at risk when that happens.

So I was pleased to recently welcome a group of international development experts to the World Bank Group’s headquarters in Washington who are all working – tirelessly – to develop climate and disaster risk screening tools.

These tools are exactly what they sound like: They provide due diligence at the early stages of project design to ensure that climate and disaster risks are flagged. Screening is a first, but essential, step to make sure that these risks are assessed and managed as we work on climate and disaster-resilient development.

All of this will help us better predict and prepare for risk, allowing nations and communities to build the capacity they need to grow resilient, and to put in place response measures in a warming and more disruptive climate.

The participants at the workshop this month were all on board with the idea that we must partner and work together to be able to meet these challenges. They agreed that the next step for the group will be to develop a questionnaire that would allow for a comprehensive mapping of existing screening tools, and to help determine potential areas of collaboration going forward.

Video Blog: World Bank Vice President for East Asia & Pacific on his Visit to Tacloban City, the Philippines

Axel van Trotsenburg's picture
Video Blog: World Bank Vice President for East Asia & Pacific on his Visit to Tacloban City, the Philippines

World Bank Vice President for East Asia & Pacific Axel van Trotsenburg talks about his visit to Tacloban City after Typhoon Haiyan caused destruction to lives, livelihoods and property.

Confessions of a mobile phone skeptic in the Pacific

Laura Keenan's picture


I must admit to being notoriously bad with a mobile phone. I forget to take it with me, leave it in parks and cafés and have never migrated to a smart phone – a simple old Nokia handset is my trusty aide. And on my part this has probably contributed to some skepticism about the discussion of development and mobile phones – which can sometimes seem a little evangelical.

OpenStreetMap volunteers map Typhoon Haiyan-affected areas to support Philippines relief and recovery efforts

Zuzana Stanton-Geddes's picture


Mapping impact on houses in Tacloban

In the aftermath of a disaster, lack of information about the affected areas can hamper relief and recovery efforts. Open-source mapping tools provide a much-needed low-cost high-tech opportunity to bridge this gap and provide localized information that can be freely used and further developed.

A week ago, devastating typhoon Haiyan hit the Philippines. As the images of the horrifying destruction emerge, there is a clear need in accessing localized high-resolution information that can guide communities’ recovery and reconstruction. Responding to this challenge, over 766 volunteers have been activated by the Humanitarian OpenStreetMap Team (HOT) to create baseline geographic data which can be freely used by the Philippine government, donors and partner organizations to support all phases of disaster recovery.

Effective Weather Forecasting Strengthens Climate Resilience

David P. Rogers's picture

 Curt Carnemark/World Bank

The latest report from the Intergovernmental Panel on Climate Change, released late last month, provides the strongest evidence thus far of how humans influence the Earth’s climate.

Weather hazards, already a present reality, are likely to become more extreme as a consequence of a rapidly warming planet.  Floods, droughts, storm surges and heat waves threaten the lives and livelihoods of everyone, but disproportionately effect the poor who are often most vulnerable and exposed to disaster risks.

Building resilience in this new world requires investments on many fronts, including in the often-neglected and underfunded national meteorological and hydrological agencies that give nations the capacity and ability to warn and respond effectively to weather-related hazards.


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