Asian Development Bank report claims disaster insurance lacking in the region
The Asian insurance market is expanding but in a fitful manner, with some countries lacking disaster or agricultural insurance schemes, according to a report by the Asian Development Bank (ABD).
The ABD report, “Disaster insurance in developing Asia: an analysis of market-based schemes", makes it clear that although the insurance sector is expanding, there are many countries that still have not started any kind of disaster or agricultural insurance schemes, including Afghanistan, Bhutan, Cambodia, Laos, Malaysia, and Myanmar.
The report said that for the agricultural insurance market, the scenario has not changed much in the last decade. The agricultural insurance markets in the countries listed are still largely dominated by government-led subsidised crop insurance schemes. Furthermore, many of the countries do not have any agricultural insurance schemes except pilot programmes that have been recently launched.
Additionally, there appears to be lack of insurance for natural disasters such as landslides, volcanic eruptions, and earthquakes in many Asian countries. The research also revealed the importance of support mechanisms for insurance schemes.
One of the ambitions of the report was to dig deeper into the question of market-based insurance and its link with resilience. However, the report said, the analysis is still limited, and the data and evidence about actual impact on the ground are weak.
It’s important to consider the aims and objectives of the different stakeholders involved when comparing insurance schemes and considering resilience impacts, researchers said.
Within the overarching goals of reducing poverty and supporting sustainable development, there can be different nuances as to what the specific objectives of insurance are, and the design and development of insurance schemes can be guided by different aims, for example, protecting the livelihoods of the poor with insurance for reductions in income and loss of assets due to climate and disaster risk.
Other aims could be to promote insurance market development as a vital element of financial risk management in the private sector, or to support faster disaster relief through climate forecasts and disaster risk financing.
