During a recent APEC seminar on “Disaster Risk Finance – APEC Roadmap for Resilient Economies” Richard Poulter, a specialist on disaster risk financing and insurance from the World Bank, suggested APEC could develop a regional insurance against disaster risk.
In his seminar presentation, Richard Poulter said that accessing insurance against disasters may be expensive for a single economy, but the cost can be significantly reduced with economies of scale. He suggested that APEC economies may pool their disaster risks and then tap insurance collectively from an international insurance provider.
Philippines Model
The seminar took place in Bacolod City in the Philippines between 29 and 30 April 2015 and was attended by 92 participants from the technical working groups of finance ministries as well as finance experts across the APEC region.
In his presentation, Poulter referred to the model that the Philippines is pursuing for some of its provinces, adding this may be applied on a regional scale.
“In so many ways the Philippines has been leading efforts toward [disaster] resiliency, and the model it is pursuing is an example,”
In particular, the Philippines has secured the assistance of the World Bank in developing an insurance framework wherein disaster-prone provinces will pool risks and then have these risks insured collectively. In case a province is hit by disaster, it can file claims from the insurance facility.
APEC Roadmap for Resilient Economies
Regional insurance is just one of the proposals for disaster resiliency that APEC member-economies may consider discussing in detail in succeeding meetings.
Other proposals include the establishment of a catalogue showing risk exposures of member-countries, creation of a platform showing data on insurance coverage of public assets, and engagement of the private sector in disaster risk financing.
Seminar participants also discussed proposals to widen penetration of microinsurance. Given its affordability, microinsurance is seen as an effective tool to protect more people and enterprises against adverse effects of disasters.
The APEC is composed of 21 member-economies, namely: Australia, Brunei, Canada, Chile, People’s Republic of China, Chinese Taipei, Hong Kong, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Thailand, the United States of America, and Vietnam.
See here for more about the APEC seminar on “Disaster Risk Finance – APEC Roadmap for Resilient Economies”
