Figure A6.2. World Bank DRFI Program Operational Framework: Actions taken by Government for financial protection Actions by Governments for Actions by Government for financial protection of society financial protection of the state Beneficiaries Government – National & Local Homeowners and SMEs Farmers and Herders Low population (Sovereign DRFI) (Property Cat Risk Insurance) (Agricultural Insurance) (Social Protection) Actions Collect and manage disaster risk Collect and manage risk and loss data and loss/impact data Quantify potential disaster related losses Collect and manage risk and loss data Quantify potential disaster related from fiscal and budget perspective Quantify potential disaster related losses from property damage Assess Risks losses on low-income population Assess potential post-disaster (short Identify proportion of losses incurred by public and private stakeholders Quantify fiscal impact of potential term and long term) funding gaps Assess capacity of domestic insurance markets disaster related losses through social protection programs Develop Financial decision making tools Promote domestic demand for insurance Develop national strategy for financial Secure contingent funding for Financial incentives through premium subsidies and/or tax breaks social protection programs protection Compulsory vs voluntary schemes Secure immediate liquidity for against disasters Awareness/education of consumers on insurance products Arrange Financial budget support following disasters: Complement/enhance social Develop domestic supply of insurance Solutions risk layering including reserves, protection programs with Assess legal and regulatory environment to allow private sector to contingent credit, and catastrophe develop/test private insurance solutions while protecting consumers insurance principles and risk transfer Risk data collection, management and sharing products including use of Secure longer term reconstruction Product development (indemnity and index based) transparent for payouts financing, e.g., insurance program Insurance pools for public assets Establish national disaster fund Establish transparent, timely and Develop risk market infrastructure to support delivery channels effective post disaster loss reporting Improve beneficiary targeting and Deliver Funds to Underwriting and claims settlement process mechanisms assessing eligibility for Beneficiaries Delivery channels through insurance agents Establish post disaster budget execution Alternative delivery channels: Banks, micro-finance Intermediaries, input payouts mechanisms to transfer funds from providers, NGOs, etc. national to subnational level and from MoF to line ministries Linkages to DRM Reduce Underlying Drivers of Risk
Figure A6.2. World Bank DRFI Program Operational Framework: Actions taken by Government for financial protection Actions by Governments for financial protection of the state Actions by Government for financial protection of society Beneficiaries Actions Government – National & Local (Sovereign DRFI) Homeowners and SMEs (Property Cat Risk Insurance) Farmers and Herders (Agricultural Insurance) Low population (Social Protection) Assess Risks Collect and manage risk and loss data Quantify potential disaster related losses from fiscal and budget perspective Assess potential post-disaster (short term and long term) funding gaps Collect and manage risk and loss data Quantify potential disaster related losses from property damage Identify proportion of losses incurred by public and private stakeholders Assess capacity of domestic insurance markets Collect and manage disaster risk and loss/impact data Quantify potential disaster related losses on low-income population Quantify fiscal impact of potential disaster related losses through social protection programs Arrange Financial Solutions Develop Financial decision making tools Develop national strategy for financial protection Secure immediate liquidity for budget support following disasters: risk layering including reserves, contingent credit, and catastrophe risk transfer Secure longer term reconstruction financing, e.g., insurance program for public assets Promote domestic demand for insurance Financial incentives through premium subsidies and/or tax breaks Compulsory vs voluntary schemes Awareness/education of consumers on insurance products Develop domestic supply of insurance Assess legal and regulatory environment to allow private sector to develop/test private insurance solutions while protecting consumers Risk data collection, management and sharing Product development (indemnity and index based) Insurance pools Secure contingent funding for social protection programs against disasters Complement/enhance social protection programs with insurance principles and products including use of transparent for payouts Deliver Funds to Beneficiaries Establish national disaster fund Establish transparent, timely and effective post disaster loss reporting mechanisms Establish post disaster budget execution mechanisms to transfer funds from national to subnational level and from MoF to line ministries Develop risk market infrastructure to support delivery channels Underwriting and claims settlement process Delivery channels through insurance agents Alternative delivery channels: Banks, micro-finance Intermediaries, input providers, NGOs, etc. Improve beneficiary targeting and assessing eligibility for payouts Linkages to DRM Reduce Underlying Drivers of Risk