Ministers from the G20, or Group of Twenty forum for global economic cooperation, recently came together in South Africa for annual meetings and the Disaster Risk Reduction Working Group advocated for the enhancement of risk transfer solutions, particularly including use of parametric insurance, risk pools, and catastrophe bonds.
Recognising their shared commitment to disaster risk reduction (DRR), in a statement the Ministers of G20 nations that make up the working group underscored, “the central importance of DRR for protecting people and the communities most at risk and for achieving sustainable development, resilience, economic stability, and prosperity.”
They recognised that disasters and shocks are increasing in frequency, intensity and geographical extent, which holds back development and strains the ability of national and international actors to respond and support countries DRR needs.
The Ministers also acknowledged the importance of international collaboration and implementing whole-of-government and all-of-society approaches to DRR, where deemed applicable and appropriate.
They also underscore that integrated, inclusive, people-centred and comprehensive approaches to DRR, sustainable development, ecosystem management, environmental protection, and climate adaptation are essential to help build sustainable resilience within and across sectors including humanitarian and development, as appropriate.
However, most relevant for our readers, is the encouragement from the Ministers to enhance and increase the utilization of affordable, inclusive pre-arranged financing. This initiative aims to support ex-ante disaster risk reduction and preparedness, ensuring a rapid, flexible, comprehensive, and equitable response and recovery in the event of a disaster.
“This could include financing that motivates ex-ante DRR such as parametric insurance, risk pools, contingent credit, catastrophe bonds, insurance guarantee facilities linked to effective delivery mechanisms, particularly adaptive social protection systems,” the statement reads.
Adding: “We support monitoring mechanisms that enhance accountability and transparency for such finance and DRR investment. We welcome mechanisms that complement prevention and risk reduction measures to lower entry costs and expand access in underserved markets and to reach those in vulnerable situations.”
If you recall, catastrophe bonds, parametric instruments and regional risk pools were outlined as being key factors that can help narrow the global natural catastrophe protection gap at a previous G20 South African event earlier this year.
Furthermore, the Ministers emphasized their acknowledgment of the critical role that digital public infrastructure plays as a vital facilitator in enhancing DRR initiatives.
They advocate for the use of cell broadcast as a scalable, last-mile communication solution, alongside other communication methods for early warning systems, which encompass digital technologies, artificial intelligence (AI), traditional approaches, and community-based strategies.
As well as this, the Ministers reiterate their commitment to promoting and implementing recovery, rehabilitation, and reconstruction phases that are accessible, inclusive, locally driven, and equitable following a disaster.
This approach aims to enhance the resilience of nations and communities by incorporating DRR measures into the restoration of physical infrastructure and societal systems, as well as into the revitalisation of livelihoods, economies, and the environment.
Also read – Resiliency-focused cat bonds could unlock billions for disaster risk reduction: UNDRR
