An one day event on “Disaster Risk Transfer and Financing Solutions for India”, organised by Munich Re, aims to bring together representatives from various Indian states, the insurance industry, government bodies, International organizations experienced in disaster risk financing and transfer and government authorities to explore and advance disaster risk financing mechanisms tailored to the region’s unique vulnerabilities
New Delhi: In a bid to develop a robust collaborative frame work on disaster financing, Munich Re, the largest global reinsurer, is organising a day-long event on “Disaster Risk Transfer and Financing Solutions for India” on Thursday here to be inaugurated by M Nagaraju, secretary, Department of Financial Services.
M.P. Tangirala, additional secretary, DFS, Parshant K Goyal, joint secretary, DFS, along with Krishna S Vatsa, member, National Disaster Management Authority (NDMA),Hitesh Kotak, Munich Re’s chief executive Japan, Korea, India, Surbhi Goel, chief executive officer Munich Re, India, Michael Roth, public sector business Specialist, Munich Re, Hui Lin Chiew, technical expert, Climate and Disaster Risk Finance and Insurance (CDRFI)
Competence Center, Frankfurt School of Finance, will also participate in the event.
This event aims to bring together representatives from various Indian states, the insurance industry, government bodies, International organizations experienced in disaster risk financing and transfer and government authorities to explore and advance disaster risk financing mechanisms tailored to the region’s unique vulnerabilities.
The objective of the deliberation is to promote the development of innovative insurance solutions, including parametric insurance, and to encourage collaboration between public and private sectors for better disaster risk management. By sharing global best practices and focusing on local challenges, the event seeks to drive actionable strategies that improve resilience and financial preparedness in the face of natural disasters in India.
A parametric (or index based) solutions are a type of insurance that covers the probability (or likelihood) of a loss-causing event happening (like an earthquake) instead of indemnifying the actual loss incurred from the event. It is an agreement to make a payment upon the occurrence of a covered event meeting or exceeding a pre-defined intensity threshold, as measured by an objective value.
India has been recording rising asset values, which have contributed to the increase in economic losses following natural catastrophes. The average annual economic loss in India over the last decade between 2013 and 2022 was 125 per cent higher than the average in the previous decade. The country had experienced 11 natural catastrophe events, generating economic losses of more than US$1 billion between 2013 and 2022, up from six such events in the decade before that.
Munich Re will also showcase illustrative parametric insurance products designed for India, including solutions tailored to North Eastern states and micro-borrowers.
Various sessions of the event will provide an overview of the key design elements, such as triggers and payout mechanisms, while demonstrating how these products address region-specific vulnerabilities and promote financial resilience.
It will also highlight the role of technology, such as real-time weather data, satellite imagery, and disaster databases, in designing efficient and transparent parametric solutions.
It will also addressing the specific needs of North Eastern states including geographical and socio-economic considerations, to enhance disaster resilience and financial preparedness.
Meanwhile a report by State Bank of India (SBI), the largest bank in the country has said the Union government, in its upcoming Budget 2025, may announce innovative measures to boost infrastructure, agriculture, MSMEs, and other critical sectors and has proposed the establishment of a Disaster Pool to manage risks of natural disasters. Modelled on the existing Nuclear and Terrorism Pools, this public-private insurance initiative could mitigate financial losses from calamities.
These measures could include alternate funding sources, targeted production-linked incentive (PLI) schemes, and strategies to strengthen India’s green economy and disaster management.
The budget may also focus on sustainability with the introduction of a green taxonomy to channel funds towards India’s climate commitments under the Nationally Determined Contributions (NDC) submitted to the United Nations Framework Convention on Climate Change (UNFCCC), said the report.