Closing the financial gap: new partnerships between the public and private sectors to finance disaster risks
This publication features a selection of case studies where governments act as buyers of innovative insurance or reinsurance products to protect themselves against the financial impact of natural catastrophes, on the basis of a set of key questions: (i) Which potential catastrophic events is the country or region exposed to and how will these be affected by climate change and future development; (ii) In which areas can disaster risk prevention be improved to reduce the potential loss (eg zone planning rules, building codes); (iii) What portion of the loss would be absorbed by the insurance sector, why by the government (at the municipal, state and national level); (iv) What are the (financial) resources that can be made available in case of an event, how quickly can they be deployed and what would be the impact of a catastrophe on a state’s fiscal budget and GDP growth; and (v) How can the public sector benefit from partnerships with the private insurance sector to transfer financial risks and help absorb the increasing burden of natural disaster relief.
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