Disaster Risk Insurance For Vulnerable Communities In Pakistan
The Government of Pakistan responds to natural disasters (increasing floods, earthquakes, cyclones and droughts) on a case to case basis, relying on domestic budgets, including diversion of resources from other projects, and on extensive financing from international donors.
While post-disaster funding from donors and multilateral financial institutions can be an important part of a government’s catastrophe risk management strategy, over-reliance on this approach has major limitations in terms of efficiency, effectiveness, and sufficiency. By ensuring that sufficient liquidity exists very soon after a disaster, modern funding approaches such as micro insurance of the vulnerable communities are being considered to help to speed recovery and ensure that scarce government funds are well used.
To support NDMA to develop a risk transfer mechanism to protect the lower income population group against extreme events that are expected to increase in frequency due to climate change impacts.
As part of the completed Phase 1, five options of a potential fund design have been prepared for the NDMA to choose from.
Under phase 2, CDKN supported the NDMA in designing an insurance strategy by undertaking a 6 month demand study in 5 districts.
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