The UN has warned of the significant economic damage natural disasters could cause in the Asia Pacific region.
In addition, the region has a very low insurance coverage despite regular and devastating natural disasters that have cost approximately $1.3 trillion over the last 50 years.
Only 8% of the region’s losses are insured.
Shamshad Akhtar, the Executive Secretary of ESCAP, highlighted the urgency of resolving this issue:
“The time for establishing solutions to these complex emerging challenges is now”
As a result of Asia’s low insurance, individuals, governments and businesses are forced to cover the high costs of natural disasters.
This, in combination with Asia’s booming urban population, will increase the economic cost of natural disasters.
Shamshad Akhtar added:
“Business, as usual, is unsustainable…policymakers and financial strategists in both the public and private sectors have to work together”
A number of innovations present unique opportunities to overcome the challenges and costs of natural disasters, such as: catastrophe risk modelling, parametric insurance, financial reinsurance, and concessional insurance.
Mami Mizutori, Head of the UN Office for Disaster Risk Reduction (UNISDR) commented on Asia’s need to become more resilient:
“At present…let’s face it: when natural hazards hit, without these mechanisms, we cannot cope with the aftermath”
National strategies that mitigate disasters and strengthen resilience, in combination with regional cooperation is key to preparing Asia for the increasing threat of natural disasters.
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Image credit : UN