Marshall Islands : Disaster Risk Financing and Insurance

This note aims to build understanding of the existing disaster risk financing and insurance (DRFI) tools in use in The Marshall Islands and to identify gaps where potential engagement could further develop financial resilience. The likelihood that a hazardous event will have a significant impact on the Marshall Islands has risen with the increasing levels of population and assets in the urban areas of Majuro and Ebeye. The low-lying atolls are at risk of damage to both assets and people as a result of storm surges and tsunamis. The Marshall Islands is expected to incur, on average over the long term, annual losses of US$3 million due to earthquakes and tropical cyclones. In the next 50 years, the Marshall Islands has a 50 percent chance of experiencing a loss exceeding US$53 million. The government takes an ex-ante approach to financing the cost of disasters, but the resources available are limited. The Marshall Islands has a maximum amount of US$15.6 million potentially available in ex-ante instruments to facilitate disaster response. The government s post-disaster budget execution process relies on a variety of financial tools, but the size of the economy limits access to immediate post-disaster cash resources. A number of options for improving disaster risk financing and insurance are presented here for consideration: (a) develop an integrated disaster risk financing and insurance strategy; (b) assess the domestic insurance market for both public and private assets to establish what products are currently offered and to determine their level of uptake; (c) carry out a quantitative analysis to determine whether contingent credit could be an effective tool to access additional liquidity post-disaster; and (d) investigate the possibility of establishing policies for financial assistance to disaster victims in remote communities.

Bibliographic Details

Main Author:	World Bank
Format:	Report biblioteca
Language:	English en_US
Published:	Washington, DC 2015-02
Subjects:	ADB, ASSET VALUE, ASSET VALUES, BANK DEBT, BONDS, BORROWING CAPACITY, BUDGETARY PROCESSES, CAPITAL MARKETS, CASH RESERVES, CASUALTIES, CATASTROPHE BONDS, CATASTROPHIC EVENTS, CENTRAL GOVERNMENT DEBT, CLIMATE CHANGE, CONTINGENCY PLANNING, COUNTRY RISK, CREDIT ARRANGEMENTS, CREDIT LINES, CURRENCY, DAMAGE ASSESSMENT, DAMAGES, DEBRIS REMOVAL, DEBT SERVICING, DEBT-SERVICE, DECLARATION, DERIVATIVES, DEVELOPMENT BANK, DISASTER, DISASTER ASSISTANCE, DISASTER EMERGENCY, DISASTER EMERGENCY RESPONSE, DISASTER INSURANCE, DISASTER MANAGEMENT, DISASTER PREPAREDNESS, DISASTER RECONSTRUCTION, DISASTER REDUCTION, DISASTER RESPONSE, DISASTER RISK, DISASTER RISK REDUCTION, DISASTER RISKS, DISASTER VICTIMS, DISBURSEMENT, DISBURSEMENTS, DOMESTIC CREDIT, DROUGHT, DROUGHTS, EARTHQUAKE, EARTHQUAKES, ECONOMIC ASSISTANCE, EMERGENCY RESPONSE, EXPENDITURE, EXPENDITURES, EXTERNAL DEBT, EXTREME EVENTS, FATALITIES, FINANCIAL INSTRUMENTS, FINANCIAL MANAGEMENT, FINANCIAL MARKETS, FINANCIAL RISK, FINANCIAL SUPPORT, FINANCING REQUIREMENTS, FIRE, FLOODING, FOOD SECURITY, FOREIGN AFFAIRS, FORMS OF CREDIT, FUNGIBLE, GOVERNMENT BONDS, GOVERNMENT EXPENDITURE, GOVERNMENT EXPENDITURES, GOVERNMENT REVENUE, GRANT FUNDING, GROSS DOMESTIC PRODUCT, HOLDING, HOUSING, HUMANITARIAN ASSISTANCE, INCOME STREAM, INDEBTED COUNTRIES, INDEMNITY, INSTRUMENT, INSURANCE, INSURANCE INDUSTRY, INSURANCE MARKET, INSURANCE MARKETS, INSURANCE PENETRATION, INSURANCE PREMIUM, INSURERS, INTERNATIONAL BANK, INTERNATIONAL DEVELOPMENT, INTERNATIONAL INSURANCE, INTERNATIONAL RELIEF, INTERNATIONAL STRATEGY FOR DISASTER REDUCTION, INVENTORY, ISSUANCE, LAWS, LIFE INSURANCE, LIFE INSURANCE PREMIUM, LIQUIDITY, LIVING STANDARDS, LOAN, LOCAL BUSINESSES, LOCAL NONGOVERNMENTAL ORGANIZATIONS, MACROECONOMIC STABILIZATION, MEDICAL SUPPLIES, MEDICINE, NATIONAL EMERGENCY, NATIONAL INVESTMENT, NATURAL CATASTROPHE, NATURAL DISASTER, NATURAL DISASTERS, NATURAL HAZARDS, NEGOTIATION, OPPORTUNITY COST, PHYSICAL DAMAGE, PORTFOLIOS, PRINCIPAL REPAYMENTS, PUBLIC ASSETS, PUBLIC DEBT, PUBLIC FUNDS, PUBLIC SPENDING, REINSURANCE, RELIEF, RELIEF SUPPLIES, RELIEF WORK, RENEGOTIATION, RESERVE, RESERVE FUND, RESERVES, RETURN, RETURNS, RISK ANALYSIS, RISK ASSESSMENT, RISK FACTORS, RISK MANAGEMENT, RISK PROFILE, RISK PROFILES, SAFETY, SAFETY NET, SITUATION REPORT, SOVEREIGN RISK, STORM, SUBSIDIARY, SWAP, SWAPS, TAX, TAX CREDITS, TAX INCENTIVES, TECHNICAL ASSISTANCE, TECTONIC PLATES, TIDAL WAVES, TROPICAL CYCLONE, TROPICAL CYCLONES, TROPICAL STORMS, TSUNAMI, TSUNAMIS, TYPHOON, TYPHOONS, UNDERWRITERS, WAGES, WIND SPEED, WIND SPEEDS,
Online Access:	http://documents.worldbank.org/curated/en/2015/02/24157734/marshall-islands-country-note-disaster-risk-financing-insurance http://hdl.handle.net/10986/21692
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