World Bank expands disaster risk management instruments

The World Bank has expanded its range of instruments to manage disaster risk, including the addition of re/insurance options.

The range of disaster risks has also been expanded, from those related to meteorological and geological events, to now include pandemics, epidemics and other events affecting health issues such as morbidity, mortality and longevity.

Previously, the Bank could only offer member countries coverage in the form of derivatives but now the options include re/insurance contracts and similar mechanisms.

The World Bank has a role in developing the market for disaster risk transfer with 18 transactions worth $1.4 billion in coverage to date.

“This additional flexibility will allow the Bank to better respond to client needs by continuing to enhance what we can offer in our role as intermediary with the markets,” said World Bank vice president and treasurer, Madelyn Antoncic. “Our participation in what ultimately becomes a risk transfer transaction provides an important demonstration effect to crowd in the private sector as risk takers.”