Heavy flooding in Jakarta, Indonesia. Credit: Bigstock

By Kitty Stapp
UNITED NATIONS, Jun 18 2015 (IPS)

Natural disasters have become a fact of life for millions around the world, and the future forecast is only getting worse.

From super typhoons to floods, droughts and landslides, these events tend to widen existing inequalities between and within nations, often leaving the poorest with quite literally nothing."The biggest mistake is that we wait for something to happen before responding to it." -- Chloe Demrovsky

In 2013 alone, three times as many people lost their homes to natural disasters than to war, according to a new policy brief by the University of Cambridge Institute for Sustainability Leadership.

The brief, which recommends incorporating accessible risk insurance into the Sustainable Development Goals (SDGs), frames all this as a human rights issue.

“States and other actors have a duty to protect the human rights of life, livelihood and shelter of their citizens, which can be threatened by natural hazards if exposure is high and resilience low or inadequate,” the brief’s author,  Dr. Ana Gonzalez Pelaez, a fellow at the institute, told IPS.

“Insurance is an essential element in building resilience, and for insurance to operate appropriate supportive regulation needs to be in place.”

She said that at least some of these resources could be allocated as part of the adaptation measures countries will negotiate at the climate talks in Paris in December.

Earlier this month, the G7 promised to insure up to 400 million vulnerable people against risks from climate change. This could be accomplished through a combination of public, private, mutual or cooperative insurance systems.

Tom Herbstein is the programme manager of ClimateWise, whose membership includes 32 leading insurance companies. He says many are actively exploring ways to extend coverage to emerging markets and vulnerable communities.

This includes using long-term weather forecasting to support small-scale agricultural coverage, to the African Risk Capacity, established to help African Union members respond to natural disasters.

“Yet entering such markets poses many challenges,” Herbstein told IPS. “These include distribution models unsuited to high-volume, low premium insurance products; a lack of historical actuarial data; populations struggling to comprehend a financial product one might never derive benefit from; and widespread political and regulatory uncertainties.”

Ultimately, he said, if coverage of poor communities is to be mainstreamed, “an alignment between insurers, political leaders, regulators and other stakeholders will be necessary to help lessen the risks – i.e. costs – associated with entering such new and challenging markets.”

Palaez says that microinsurance is also moving further into the mainstream strategy of major commercial insurers like Alliance and Swiss Re. In January 2015, a consortium of eight global insurance institutions announced the creation of Blue Marble Microinsurance, an entity formed to open markets and deliver risk protection in underserved developing countries.

There have already been success stories. In the aftermath of Typhoon Haiyan in October 2013, CARD MBA of the Philippines paid claims to almost 300,000 customers affected by the catastrophe within five days of the event.

But some disaster experts also emphasise that an ounce of prevention is worth a pound of cure. And even the best intentions can have lacklustre results.

Haiti is a prime example. More than five years ago, a massive earthquake struck the Caribbean nation, already the poorest in the region, killing more than 230,000 people.

A year later, the Red Cross initiated a multimillion-dollar project called LAMIKA to rebuild damaged or destroyed homes, and amassed nearly half a billion dollars in donations. But according to a recent investigation by ProPublica, only six homes were actually built.

Chloe Demrovsky, executive director of the non-profit Disaster Recovery Institute (DRI), says aiding local communities in the immediate aftermath of a disaster will never be a simple task.

“The biggest mistake is that we wait for something to happen before responding to it,” she told IPS. “Many disasters could be prevented by focusing on preparing our communities in advance. Each disaster event presents unique challenges, so there is no option to apply a one-size-fits-all approach.

“For this reason, the idea of promoting resilience is gaining ground over the traditional approach of disaster risk reduction. Resilience means the ability to bounce back from a shock. The resilience of a community in terms of disaster recovery is dependent on the resources, level of preparedness, and organizational capacity of that community.  Strong communities recover faster.”

She said that the concept of “business continuity” is a key component of building resilient systems.

“Vulnerable communities are always the hardest hit during a large-scale disaster and it is important that the government deploys enough resources quickly enough to help them recover. If the private sector is adequately prepared, that will reduce the government burden and allow them to focus resources on the most adversely affected communities.

“The private sector needs to be included in every stage of the process in order for it to be an asset rather than a potential detractor from the major goals of improving our approach to disaster aid.”

She added that it’s most useful to give cash donations rather than sending material goods, and it is preferable to give to a local organisation rather than a large international organisation with name recognition.

“The local NGO is used to working in that community, understands its unique system, and will be able to more rapidly identify its needs.  Because they are local, they will also remain in the area for the long-term even after the original outpouring of aid begins to dry up,” she pointed out.

“Finally, we need to learn from past experiences and start to prepare for the next disaster before it happens. Many tragedies can be prevented by having a good plan in place. Events happen, but disasters are man-made.”

Edited by Kanya D’Almeida

View of the Third World Conference for Disaster Risk Reduction (WCDRR) in Sendau, Japan. Vanuatu’s President Baldwin Lonsdale told delegates he was attending because the Pacific island, hit by Cyclone Pam in early March, “wants to see a strong new framework on disaster risk reduction which will support us in tackling the drivers of disaster risk such as climate change". Credit: Katsuhiro Asagiri/IPS

By Jamshed Baruah
SENDAI, Japan , Mar 16 2015 (IPS)

Cyclone Pam has not only caused unprecedented damages to the Pacific island of Vanuatu but also lent urgency to U.N. Secretary-General Ban Ki-moon’s plea that disaster risk reduction is in “everybody’s interest”.

“Sustainability starts in Sendai,” Ban declared at the opening of the Third World Conference for Disaster Risk Reduction (WCDRR), the largest-ever high-level meeting on the theme, which kicked off on Mar. 14 in Sendai, the centre of Japan’s Tohoku region, which bore the brunt of the 2011 earthquake and tsunami that led to the Fukushima nuclear power plant disaster.

The conference is expected to conclude with the adoption on Mar. 18, when WCDRR is scheduled to close, of a new agreement on disaster risk reduction, which will provide guidance on how to reduce mortality and economic losses from disasters.“Disaster risk reduction advances progress on sustainable development and climate change [which] is intensifying the risks for hundreds of millions of people, particularly in small island developing states and coastal areas” – U.N. Secretary-General Ban Ki-moon

“This is the first stop on our journey to a new future to put our people of the world and this world onto a sustainable path,” Ban told government leaders and civil society representatives from around the world.

“Disaster risk reduction advances progress on sustainable development and climate change,” Ban said, adding that “climate change is intensifying the risks for hundreds of millions of people, particularly in small island developing states and coastal areas.”

Experts consider climate change as the cause for the increasingly unpredictable pattern of cyclonic activity affecting Vanuatu in recent years.

“I speak to you today with a heart that is so heavy,” said Vanuatu’s President Baldwin Lonsdale addressing the opening session, visibly fighting back his tears. “I stand to ask you to give a lending hand in responding to this calamity that has struck us.”

This is indeed a major calamity for the Pacific island nation. Every year it loses six percent of its gross domestic product (GDP) to disasters. “This cyclone is a huge setback for the country’s development. It will have severe impacts for all sectors of economic activity including tourism, agriculture and manufacturing,” said Lonsdale.

“The country is already threatened by coastal erosion and rising sea levels, in addition to five active volcanos and earthquakes. This is why I am attending this conference and why Vanuatu wants to see a strong new framework on disaster risk reduction which will support us in tackling the drivers of disaster risk such as climate change.”

As Vanuata reeled under the impact of the cyclone, Prime Minister Shinzo Abe of japan pledged four billion dollars in disaster prevention aid, mainly for developing countries.

The International Federation of Red Cross and Red Crescent Societies (IFRC) launched an initiative on Mar. 15 to scale up community and civic action on resilience, the so-called ‘One Billion Coalition for Resilience’.

The IFRC has committed itself to mobilising its network of 189 national Red Cross and Red Crescent Societies and 17 million volunteers around the world to increase different services that link disaster preparedness, emergency response and longer term recovery needs of local communities.

The Special Representative of the U.N. Secretary-General for Disaster Risk Reduction, Margareta Wahlström, commended the IFRC’s efforts to galvanise actions toward making communities more resilient.

“We need to scale up our collective efforts to make sure that hazards don’t become disasters, and we will only be able to achieve this by building alliances at every level,” she said. ”Only in partnership can we contribute to transforming the lives of the most vulnerable people and support their efforts in building stronger communities.”

Apparently realising the need of the hour, top insurers from around the world have called on governments to step up global efforts to build resilience against natural disasters, highlighting that average economic losses from disasters in the last decade have amounted to around 190 billion dollars annually, while average insured losses were at about 60 billion dollars.

A ‘United for Disaster Resilience Statement’ was released Mar. 14 by top insurance companies, members of the UNEP Finance Initiatives’ Principles for Sustainable Insurance (PSI), the largest collaborative initiative between the United Nations and the insurance industry. PSI is backed by insurers representing about 15 percent of the world’s premium volume and nine trillion dollars in assets under its management.

The statement urges governments to adopt the U.N. Post-2015 Framework on Disaster Risk Reduction, emphasising that the insurance industry is well placed to understand the economic and social impact of disasters given that its core business is to understand, manage and carry risk.

Lauding the initiative, Achim Steiner, U.N. Under-Secretary-General and Executive Director of the U.N. Environment Programme (UNEP), said: “The vision and initiative demonstrated by the insurance industry – from the launch of the landmark Principles for Sustainable Insurance at the Rio+20 conference to the strong, united commitments made here in Sendai – provide inspiration and a way forward.”

Another PSI initiative launched in Sendai called on individual insurance organisations to help implement the Post-2015 Framework for Disaster Risk Reduction by making voluntary, specific, measurable and time-bound commitments.

The voluntary commitments will follow the global framework afforded by the four Principles for Sustainable Insurance, and will show concrete actions that build disaster resilience, and promote economic, social and environmental sustainability.

These commitments will be aggregated and promoted en route to a major UNEP and insurance industry event in May this year, which will be hosted by the global reinsurer, Swiss Re.

The commitments will also be promoted by the PSI at the Global Insurance Forum of the International Insurance Society in New York in June. The forum will include a dedicated day at the U.N. headquarters for insurance industry leaders and U.N. officials to address sustainable development challenges and opportunities, from climate change and disaster risk, to financial inclusion and ageing populations.

Edited by Phil Harris    

About 4,000 pastoralists are benefiting from a livestock insurance product that covers half of northern Kenya. Credit: Miriam Gathigah/IPS

By Miriam Gathigah
NAIROBI, Nov 6 2013 (IPS)

“That is the sound I love the most in the whole world,” Hussein Ahmed says as the bells tied to his cattle begin clinking as they return home. Ahmed, a pastoralist in Marsabit district in arid and semi-arid northern Kenya, lost all his animals in 2011 during one of the worst droughts in the region for over 60 years.

At the time, Ahmed travelled to neighbouring Ethiopia in search of water and pasture for his cattle.

“I was running away from armed cattle rustlers who came to steal animals that were spared by the drought. During the 250 km journey from Marsabit to Ethiopia I lost all my animals due to the lack of pasture and water.

“Before that [I lost my animals] to cattle rustlers trying to replace what they had lost to drought,” Ahmed tells IPS.

He returned to Marsabit one month later, dejected and empty-handed. But a clansman, who had signed up for a pilot livestock insurance product, gave Ahmed five goats and a cow and a chance to start over.

Life is different now. Ahmed has restored his herd and has security, even in the face of drought and continued cattle rustling.

A year ago he signed up for the same pilot livestock insurance product that his clansman has – the first ever cover for pastoralists in Kenya, which is being offered by NGO International Livestock Research Institute (ILRI).

“I joined in 2012, and since then I have been paid for lost livestock on two occasions, including in March this year,” Ahmed says.

The insurance is subsidised by ILRI’s partners: the United Kingdom’s Department for International Development, the European Union and the Australian Agency for International Development.

At first cover was only available in Marsabit. But in August it was implemented in the northern Kenyan counties of Isiolo and Wajir. And thanks to its success in this East African nation, it is now being piloted in Borana, an arid and semi-arid zone in southern Ethiopia.

According to ILRI, 4,000 or half of the pastoralists in northern Kenya have been covered. However, it is difficult to verify the total number of pastoralists in the region. Teresia Njeri, an environmental official in northern Kenya, tells IPS this is because “pastoralists do not stay in one place for long, they move around constantly.”

The herders play a significant role in the region. According to Kenya’s ministry of agriculture, livestock and fisheries, the estimated value of the country’s pastoral livestock sector is 800 million dollars. World Bank figures show that Kenya has a total GDP of about 37 billion dollars. And the Intergovernmental Authority on Development in Eastern Africa, a regional trading bloc, estimates that over 90 percent of the meat consumed in East Africa comes from pastoral communities.

But the life of a pastoralist has always been a difficult one. Issa Salesa, a pastoralist in Isiolo, tells IPS that they are always vulnerable. “Drought usually strikes many parts of northern Kenya from June to December and it gets worse between January and April, so basically pastoralists and their animals are at risk of starvation and violent attacks by cattle rustlers all year round,” Salesa says.

But now Ahmed and Salesa, like the thousands of other pastoralists in their districts who have signed up for the insurance, know that if their animals die in a drought, they will receive compensation for them. For Ahmed this means that his family will have food throughout the year and his children can now attend school.

Yusuf Aden, a pastoralist in Marsabit and a beneficiary of the insurance product, tells IPS that pastoralists are required to insure at least 10 of their livestock and premiums vary from animal to animal.

“For instance, for 10 goats and above you pay a premium of about 20 dollars per year. This is affordable because we only sell one goat to raise the money to insure at least 10 goats,” Aden says.

“[The insurance] aims to compensate clients in the event of a loss but unlike traditional insurance, which makes payouts based on case-by-case assessments of individual clients’ loss realisations, this livestock insurance pays policy holders based on an external indicator, such as the availability of pasture,” Andrew Mude, who is in charge of the livestock insurance project at ILRI, tells IPS.

He explains that satellite data provides estimated readings of pasture availability and there is a policy payout when pasture scarcity is predicted to cause livestock deaths in an area.

Insured herders are compensated for an above 15 percent loss of their livestock. But the benefits to their lives have been greater.

“Insured households have experienced a 33 percent drop in the likelihood of reducing their nutritional intake, a 50 percent drop in distress sales of livestock [this happens when there is drought] and 33 percent in their food aid reliance,” Mude says.

Though it is not certain that this new insurance will catch on in the rest of Kenya. Insurance broker Beatrice Wambui points out that “insuring livestock is not commercially viable.”

“Insuring against nature is a risky business, you have no control over climate … But in areas where livestock insurance is working, and if companies can find ways to be in a win-win situation with herders, this product is changing lives,” Wambui tells IPS, adding that unless insurance companies partnered with NGOs they would not be able to reach pastoralists.

She explains that while insurance companies were beginning to consider introducing a similar product, they were doing so on “a very small scale and are unwilling to advertise it.”

“Some are working with as few as 50 clients just to see how it pans out in a year,” Wambui says.

Njeri points out that while the ILRI insurance was improving livelihoods and security, it needed to reach a wider audience.

Pastoralists from the Samburu, Turkana, Pokot and Marakwet districts of northern Kenya still remain at risk of losing the source of livelihoods to cattle rustlers – the insurance is not yet available in these areas.

Moses Lentoimaga is a pastoralist from Samburu district and he lives in fear of riffle-wielding cattle rustlers. Bandits attacked his village on Oct. 18 and killed five of his neighbours and stole 1,000 cattle. He too wants the security that Ahmed and Aden have.

“Before going to our neighbours in Ethiopia, they should first come to our rescue,” Lentoimaga tells IPS.