Closing the protection gap: Disaster risk financing - smart solutions for the public sector

This publication highlights financial tools governments and other organisations can use to protect communities before a catastrophe strikes. It introduces on innovative risk-transfer programmes ranging from macro-level solutions for countries to regional pool programmes for groups of countries that face similar risks. It also explains some tools for subnational institutions and NGOs to help shore up resilience. Finally, it details case studies where these tools have been applied. The case studies highlight schemes for individual countries, insurance pools for those facing similar risks, solutions for regions and urban centres, as well as mechanisms that make insurance directly accessible for individuals.

Usually governments seek funds after a natural disaster, a practice that can trigger higher taxes and borrowing, which can lead a community or country further into debt. Rating agency Standard and Poor's even says that a country's credit disaster preparedness could have an impact on its credit rating. But the tools described in this document can help prepare communities bounce back.