OECD Recommendation on disaster risk financing strategies

The effective financial management of disaster risks is a key public policy challenge for governments around the world, particularly those faced with significant exposures to such risks and/or limited capacity to manage the financial impacts of natural and/or man-made disasters, such as floods, earthquakes, cyclones, terrorist attacks, industrial and technological accidents, and pandemics.

With these considerations in mind, the OECD has adopted a Recommendation on Disaster Risk Financing Strategies that provides guidance on the development of strategies for the financial management of disaster risks.

The Recommendation provides a set of high-level recommendations for designing a strategy for addressing the financial impacts of disasters on individuals, businesses and sub-national levels of governments, as well as the implication for public finances.

It specifically targets issues related to the financial management of disaster risks, while recognising the importance of an integrated approach to disaster risk management and the contribution of risk assessment, risk awareness and risk prevention to the financial management of disaster risks, drawing on the lessons that have been learned through the OECD’s work for the G20 and APEC Finance Ministers. In that regard, it complements the OECD Recommendation on the Governance of Critical Risks, providing and integrated set of OECD guidance on disaster risk management and financing.

This Recommendation replaces the 2010 Recommendation on Good Practices for Mitigating and Financing Catastrophic Risks.