BALZER Niels - Weather Index Insurance and Disaster Risk Reduction


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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
  • BALZER Niels - Weather Index Insurance and Disaster Risk Reduction

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