Marshall Islands : Disaster Risk Financing and Insurance
This note aims to build understanding of the existing disaster risk financing and insurance (DRFI) tools in use in The Marshall Islands and to identify gaps where potential engagement could further develop financial resilience. The likelihood that...
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| Format: | Report |
| Language: | English en_US |
| Published: |
Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/02/24157734/marshall-islands-country-note-disaster-risk-financing-insurance http://hdl.handle.net/10986/21692 |
| Summary: | This note aims to build understanding of
the existing disaster risk financing and insurance (DRFI)
tools in use in The Marshall Islands and to identify gaps
where potential engagement could further develop financial
resilience. The likelihood that a hazardous event will have
a significant impact on the Marshall Islands has risen with
the increasing levels of population and assets in the urban
areas of Majuro and Ebeye. The low-lying atolls are at risk
of damage to both assets and people as a result of storm
surges and tsunamis. The Marshall Islands is expected to
incur, on average over the long term, annual losses of US$3
million due to earthquakes and tropical cyclones. In the
next 50 years, the Marshall Islands has a 50 percent chance
of experiencing a loss exceeding US$53 million. The
government takes an ex-ante approach to financing the cost
of disasters, but the resources available are limited. The
Marshall Islands has a maximum amount of US$15.6 million
potentially available in ex-ante instruments to facilitate
disaster response. The government s post-disaster budget
execution process relies on a variety of financial tools,
but the size of the economy limits access to immediate
post-disaster cash resources. A number of options for
improving disaster risk financing and insurance are
presented here for consideration: (a) develop an integrated
disaster risk financing and insurance strategy; (b) assess
the domestic insurance market for both public and private
assets to establish what products are currently offered and
to determine their level of uptake; (c) carry out a
quantitative analysis to determine whether contingent credit
could be an effective tool to access additional liquidity
post-disaster; and (d) investigate the possibility of
establishing policies for financial assistance to disaster
victims in remote communities. |
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