Insuring against natural disaster risk in Mexico: case study
This case study is part of World Bank Treasury's financial solutions in practice series. It introduces Mexico government's initiatives, which allowed the country to move from an ex-post response to natural disasters to an ex-ante preparedness approach, through: (i) the fund for natural disasters, to which it transfers budgetary funds for disaster relief and reconstruction efforts; and (ii) an institutional framework for disaster preparedness involving risk assessment, risk reduction, the promotion of a culture of prevention, and insurance.
The paper also features Mexican sub-national governments achievements in securing low-cost local currency financing from the International Bank for Reconstruction and Development (IBRD), and eliminating currency risk for themselves, the domestic development bank, and the federal government.