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BALZER Niels - Weather Index Insurance and Disaster Risk Reduction
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BALZER Niels - Weather Index Insurance and Disaster Risk Reduction

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Weather Index Insurance and Disaster Risk Reduction

Weather Index Insurance and Disaster Risk Reduction

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  • Drought insurance for GoE – 5 million beneficiaries (in addition to Productive Safety Net Program - PSNP) AxaRe: Premium 0.93 million US$, max payout 7.1 million US$Not triggered due to favourable weather conditions

Transcript

  • 1. World Food ProgrammeWeather Index Insuranceand Disaster Risk ReductionMandate, Experience and Outlook
    3 June 2010 – GRF IDRC Davos
  • 2. Contents
    WFP DRR Mandate and Policy Background
    Weather Index Insurance Experience in Ethiopia
    Weather Risk Management Facility: Study on Scalability and Sustainability of WII
    Way forward for WFP
  • 3. WFP and DRR
    Strategic Plan - From food aid to food assistance
    Strategic Objective 2: Disaster Risk Reduction
    DRR Policy 2009
    Understanding Risk
    Prevention
    Preparedness
  • 4. Risk Transfer Schemes
  • 5. LEAP objective and purpose
    Livelihoods – Early Assessment – Protection (LEAP) Project in Ethiopia (ongoing)
    Based on 2006 Ethiopia Drought Index project experience
    Project that links drought and flood monitoring and early warning with the GoE managed risk management framework
    Software platform to calculate weather based indices:
    Monitoring of drought and floods
    Guide to disbursements for a safety netscale-up
    Shift from managing disasters to managing risk
  • 6. Ethiopia Risk Management Framework
    Ethiopia Risk Management Framework
    II. Develop budgeted contingency plans
    I. IMPROVE INDEX: LEAP
    Early Warning System
    with reliable baseline and trigger points
    Contingency Planning
    for appropriate and timely response
    Capacity Building
    for effective plan implementation
    Ex-Ante Financing
    of contingency plans
    IV.Establish timely emergency financing through use of contingency financing
    III. Build planning and implementation capacity at regional level
  • 7. WRSI: Water Requirement Satisfaction Index and 19 related parameters (PET, water excess etc.)
    Yield reduction estimates
    Livelihood parameters Number of food insecure rural people, cost for livelihood protection
    Open source: http://vam.wfp.org/leap
    LEAP Software Platform Products
  • 8. WRSI Index = intermediate product
    LPCI
    Crop
    and
    Weather
    Information
    Number of
    Beneficiaries
    Crop baskets
    Water Balance
    Calculation
    Crop Yields
    Rangeland Yields
    WRSI
    Index
    Livelihoods shocks
    Prices of Food
  • 9. WHAT DO WE WANT FROM LIVELIHOOD PROTECTION COST INDEX?
    Represent cost of intervening early to protect vulnerable livelihoods
    Signal amount of financial resources needed for regions to protect vulnerable livelihoods before harvest
    Trusted by GoE and donors to trigger timely resources
    Provide early warning of livelihood stress levels
  • 10. CONTINGENCY PLANNING
    triggers
    activates
    implement
    • Drought Risk Assessment, Vulnerability Profiles
    • 11. Drought Impact Assessment
    • 12. Drought Scenarios
    • 13. Types of intervention needed
    • 14. Timing of intervention
    • 15. Target population
    • 16. Costs
    • 17. Implementing partners
    protects
    Contingent Financing
    Contingency Plans
    LPCI
    Appropriate and timely response
    Livelihoods
  • 18. IFAD – WFP Weather Risk Management Facility (WRMF) Study Report
    “The Potential for Scale and Sustainability in Weather Index Insurance for Agriculture and Rural Livelihoods”
  • 19. Recommendations
    • Create a proposition of real value to the insured, and offer insurance part of a wider package of services;
    • 20. Build the capacity and ownership of implementation stakeholders;
    • 21. Increase client awareness of index insurance products;
    • 22. Graft onto existing, efficient delivery channels, engaging the private sector from the beginning;
    • 23. Access international risk-transfer markets;
    • 24. Improve the infrastructure and quality of weather data;
    • 25. Promote enabling legal and regulatory frameworks; and
    • 26. Monitor and evaluate products to promote continuous improvement.
  • Way forward for WFP
    Continuation of conditional transfer schemes aimed at increasing community resilience
    Weather Risk Management Facility partnership with IFAD to continue
    Provide technical assistance and capacity building in weather risk management   
    Improve weather infrastructure, climate data, and applications
    Support the development of enabling environments for weather risk management tools, including weather index-based insurance
    Improvement of project quality through development of a DRR and CCA toolbox
    Rome-based DRR partnership (WFP-FAO-IFAD)
  • 27. End
    www.wfp.org/disaster-risk-reduction
    www.wfp.org/climate-change
    niels.balzer@wfp.org
    richard.choularton@wfp.org
    Thank you!