Global Assessment Report on Disaster Risk Reduction 2013
From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction

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Private investment largely determines disaster risk: In most economies
70–85 percent of overall investment is made by the private sector,
including annual
institutional investments worth more than US$80
trillion globally. Both regulators and investors are increasingly demanding that
businesses disclose their hidden risks, including disaster risks (Chapter 12).
It’s no longer “business as usual”: Recent major disasters such as
Hurricane Sandy in 2012 and the 2011 floods in Thailand focused attention on the
growing impact of disasters on the
private sector (Chapter 1). Many large
global businesses are now strengthening their risk management capacities. Yet,
businesses still display a
‘blind-spot’ to disaster risk, which is largely
ignored in
economic forecasts and growth projections (Chapter 12).
Insurance is critical to business resilience. Yet insurance pricing often
does not reflect risk levels or provide an adequate incentive for risk sensitive
business investment, particularly in low and middle income countries with low
penetration rates but rapidly growing markets (Chapter 13). In China, for example,
only 3 percent of properties are insured against earthquake and 5
percent against typhoons and floods.
Governments report significant progress in developing more
effective disaster
response and preparedness strategies and are investing more to address
risks. Yet, the required shift to
anticipate risks in public and private
investment remains a challenge for most(Chapter14). The number of export
oriented Special Economic Zones has expanded from 176 zones in 47
countries in 1986 to 3,500 zones in 130 countries in 2006. Many such zones are
located in hazard-exposed areas increasing disaster risks.
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