Disaster Risk Financing and Insurance Phase II

SECO is partnerning with the World Bank to implement the Disaster Risk Financing and Insurance (DRFI) Program to support primarily SECO priority countries in building their financial resilience to natural disasters. Countries receive technical assistance helping them in their advance planning of financing needs in the case of natural disasters.

Country/region Period Budget
01.12.2016 - 31.12.2021
CHF 2'500'000
Background SECO Priority Countries are significantly exposed to natural disasters which often represent a large financial burden for government budgets. The program provides support in securing exante sources of financing for these costs as opposed to relying on expost solutions, such as raising taxes, borroing more, reallocating budgets, or covering costs through donor assistance. Exante financing requires advance planning. This includes risk retention instruments such as reserve funds, contingent credit lines or marketbased instruments through which risk is transferred to third parties.
Objectives The overarching objective is to increase the financial resilience and response capacity of governments and to strengthen the domestic catastrophe insurance markets (e.g. property catastrophe insurance).
Medium-term outcomes Improved institutional capacity to understand, quantify and manage the economic and fiscal impact of natural disasters as measured by (a) the number of national and subnational governments with disaster risk finance analytics to support riskinformed decision making and (b) the number of national governments with new or enhanced national disaster risk financing strategies.Improved financial capacity to meet financial needs post disasters as measured by the amount of preplanned and programmed financial resources available for natural disasters in individual countries.Improved use of private sector to support country financial resilience as measured by (a) the number of specific improvements to legal, regulatory and technical aspects of risk market infrastructure and (b) the number of operations involving the private sector.

Expected results:   Economic and fiscal catastrophe risk profiles.National strategies for the fiscal protection of the state against natural disasters.Analytics tools for riskinformed decision making.Technical notes.Prototype disaster risk financing instruments (e.g., contingent credit facility, insurance).

Results from previous phases:   The first phase of the DRFI Program (20122016), was assessed through an external evaluation in 2016. The evaluation showed that significant progress has been achieved in Peru, Colombia, Morocco, Serbia and Vietnam. Most progress was observed in the areas of catastrophic risk modelling and development of DRFI strategies. However, while results have been achieved on these technical aspects in five countries, implementation and institutionalization of the program has so far only been achieved in two (Peru and Colombia) and even these countries several aspects have to be considered as 'work in progress'. Therefore, further assistance is required to consolidate past achievements and institutionalize the respective strategies and mechanisms. For this reason the program in its second phase puts a particular emphasis on activities and targeted communication to improve the buyin of the executive/political level.

Directorate/federal office responsible SECO
Credit area Swiss cooperation with Eastern Europe
Project partners Contract partner
  • World Bank - International Bank for Reconstruction and Development

Budget Current phase Swiss budget CHF   2'500'000 Swiss disbursement to date CHF   0 Budget inclusive project partner CHF   84'000'000
Project phases Phase 10 01.12.2016 - 31.12.2021   (Current phase)