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TUE4.4: Special Swiss Re session on Economics of Disasters – Costs and Financing mechanisms
Swiss Re Session
Special Swiss Re session on economics of disasters – costs and financing mechanisms
Swiss Reinsurance Ltd
2011 saw extraordinary and devastating catastrophic events. With USD 370bn the highest economic losses to society due to natural and man-made disasters ever were recorded. The earthquakes in Japan, New Zealand, and Turkey, as well as the floods in Australia and Thailand, were unprecedented and brought not only massive destruction but also the loss of thousands of people’s lives. The famine due to severe drought in the Horn of Africa is believed to be the largest human catastrophe of the year. The events in Japan and Thailand also reminded us of the vulnerability of the global supply chains as key manufacturing companies were faced with business interruptions. The resilience of a society not only depends on the severity of an event, but also on the preparedness and available funding for relief, recovery and reconstruction. This session will discuss economic consequences of disasters, how to assess risks and costs, and how to mitigate and finance them.
Cost assessment of natural hazards – state-of-the-art, knowledge gaps and recommendations
1Helmholtz Centre for Environmental Research- UFZ; 2Institute for Environmental Studies, Vrije Universiteit Amsterdam- IVM-VU; 3Institute of Environmental Science and Technology, Universitat Autònoma de Barcelona- ICTA-UAB; 4German Research Centre for Geosciences- GFZ; 5Dipartimento di Scienze della Terra, Università degli Studi di Ferrara- UniFe; 6Société de Mathématiques Appliquées et de Sciences Humaines/Centre International de Recherches sur l'Environnement et le Développement- SMASH-CIRED; 7Flood Hazard Research Centre, Middlesex University- FHRC-MU; 8Institute of Geography, University of Innsbruck, Austria- UIBK; 9University of Potsdam, Germany
Effective and efficient reduction of, or adaptation to, natural hazard risks requires a thorough understanding of the costs of natural hazards in order to develop sustainable risk management strategies. The current methods that assess the costs of different natural hazards employ a diversity of terminologies and approaches for different hazards and impacted sectors. This makes it difficult to arrive at robust, comprehensive and comparable cost figures.
Risk Management of Natural Disasters in Morocco: a project of Global and Integrated Strategy
Government of Morocco
Morocco as the rest of the countries is faced with potentially extreme events, due to the number of natural phenomena. These risks are currently managed by many departments. In order to overcome this fragmented management and better coordinate the efforts of various departments, the Government with support from the World Bank and the Swiss Cooperation has launched in 2009 the project of preparing a comprehensive and integrated strategy for managing natural risk reduction in Morocco.
Economic impact of disasters in the Caribbean and experience with CCRIF
Government of Cayman Islands
The Caribbean Cat Risk Insurance Facility (CCRIF) has allowed the Cayman Islands to secure an effective means of transferring some of the financial risks associated with their catastrophic risk exposures. It has also helped to highlight the need for active and comprehensive catastrophe risk management and encouraged decision makers to take firm steps to implementing appropriate solutions.
African Risk Capacity – Sovereign Disaster Risk Management for Africa
World Food Programme
On average over the last five years, the UN World Food Programme has spent half a billion dollars annually in food assistance in Africa due to weather-related emergencies. Funding is secured on a largely ad hoc basis after disaster strikes and only then can relief be mobilized. In the meantime, lives and livelihoods are lost, assets are depleted and development gains experience significant setbacks. The African Risk Capacity, ARC, is a groundbreaking project of the African Union designed to improve current responses to drought-related food security emergencies and to build capacity within AU member states to manage drought risks. As an African-owned, continental index-based weather risk insurance pool and early response mechanism, ARC offers an African solution to one of the continent's most pressing challenges. By bringing together the concepts of insurance and contingency planning, ARC aims to create a new way of managing weather risk by transferring the burden away from African governments to international financial markets that can handle the risk much better. This entity will use advanced satellite weather surveillance and software - developed by the UN World Food Programme (WFP) - to quantify the continent's risk, estimate and trigger quick-disbursing funds to help African countries hit by severe drought implement effective and timely responses to vulnerable populations.