EXPERT MEETING ON REQUIREMENTS OF THE CATASTROPHE INSURANCE

EXPERT MEETING ON REQUIREMENTS OF THE CATASTROPHE INSURANCE AND WEATHER RISK MANAGEMENT MARKETS FOR NATIONAL METEOROLOGICAL AND HYDROLOGICAL SERVICES 5 -7 December 2007, WMO Headquarters, Geneva, Switzerland World Bank Group Catastrophic Risk Financing World Bank’s Initiatives Eugene Gurenko Lead Insurance Specialist Olivier Mahul Program Manager, Insurance for the Poor

Strengths of the World Bank for natural disaster risk management n n World Bank Group It is the only multilateral organization with the world-class knowledge in-house already installed in natural risk management. The World Bank has: t t t t Insurance expertise Treasury expertise (as investment bank for countries) Risk management expertise Lowest cost of borrowing in the world Knowledge of the risk map globally and individually for each country Contacts in each country Convening power Reputation 2

Alphabet Soup n n n World Bank Group CCRIF GFDRR GIRIF Cat DDO GCMB WB CRIWG 3

Caribbean Catastrophe Risk Insurance Facility World Bank Group Reinsurance/ART (Purchased on international financial markets) Country 1 Country 2 Country 3 Premium Insurance Premium Country 4 Country 5 Country 6 Country 7 Insurance Payout Growth Reserves Initial donor contribution 4

Global Facility for Disaster Risk Reduction n Track II t t t n World Bank Group Operates as a multi-donor trust fund Provides technical assistance to assist low- and middleincome countries to mainstream disaster risk reduction Key deliverables include ex ante disaster risk financing Some GFDRR-funded projects t t t Parametric flood insurance for agriculture in Vietnam Weather based crop insurance in India Parametric flood insurance in Bangladesh Central American catastrophe insurance pool Pacific Catastrophic Risk Pool Etc. 5

Global Index Reinsurance Facility n Objectives t n Provide parametric (re)insurance solutions in ACP countries EU Trust Fund t t n World Bank Group Technical assistance Premium subsidies Index Re t Specialized insurance company capitalized by IFC, a reinsurance Company, etc. 6

Disaster Risk Management Loan for IBRD Eligible Borrowers (Cat DDO) n n Disaster Risk Management Loan for IBRD Eligible Borrowers Assurance of automatic drawdown upon an occurrence of disaster – – – n n n World Bank Group Immediate disbursement after the occurrence of a disaster Certainty of disbursement Flexible use of funds (a budget support instrument) Affordable pricing Long drawdown period The Bank’s assistance in establishing effective disaster risk management program 7

Global Catastrophe Mutual Bond World Bank Group 8

World Bank Catastrophic Risk Insurance Working Group n n n World Bank Group Established in October 2007 Coordinates the WB initiatives on catastrophic risk financing Inform/collaborate with outside partners on WB cat risk financing initiatives 9