Risk financing is key to building resilience against disasters

Asian Development Bank: Disaster losses have risen faster than Asia-Pacific’s economy has expanded, says a new report from the Asian Development Bank (ADB), which recommends regional governments find ways to offer disaster risk financing instruments such as calamity funds, tax credits, and catastrophe bonds to strengthen disaster resilience.

 “Asia’s economic gain is being eroded by disasters, often hitting the poorest hardest,” said Bindu Lohani, ADB’s Vice President for Knowledge Management and Sustainable Development. “As the global region most vulnerable to climate change, we no longer have a choice but to focus on disaster risk management.”

Significant investments to strengthen disaster resilience can reverse this, says Investing in Resilience - Ensuring a Disaster-Resistant Future, which notes that a wide range of gaps and obstacles sit behind the existing trend of rising disaster losses, such as inadequate risk data, weak and misaligned incentives, poor legislative and regulatory frameworks and enforcement, disjointed government, limited funding, and power disparities.

Natural hazards continue to cause significant loss of life in Asia and the Pacific. Between 1970 and 2010, 1.7 million hazard-related deaths were recorded in the region – 51% of the global total.

The report examines the instruments and mechanisms that currently exist in Asia to protect against disasters, and offers solutions for stronger disaster resilience, including how disaster risks can be financed through disaster risk insurance, reinsurance, catastrophe bonds, and other means....

Click through to the ADB website for a closer look at their infographic