Strengthening disaster risk finance to defend economies against more frequent and devastating natural calamities brought on by climate change was stressed at the start of the two-day Asia Pacific Economic Cooperation meeting at the SMX Convention Center in Bacolod City yesterday.
The poorest and the most vulnerable people must be attended too and microinsurance is an innovative tool, Arup Chatterjee, principal financial sector specialist of the Asian Development Bank, said.
The global annual price tag in damage caused by growing devastating natural disasters exceeds more than $300 billion, he said, citing the recent earthquake that hit Nepal.
The earthquake destruction and damage in Nepal has been widespread, C hatterjee said , as he conveyed the ADB's deepest condolences and sympathies to the people of Nepal.
Chatterjee, who spoke before more than 100 delegates from 21 economies at the APEC disaster risk finance meeting , said APEC member economies can watch the number of disaster victims grow as more people suffer or can dramatically lower that figure and invest savings in development.
He said the ongoing meeting in Bacolod is geared towards translating crisis into opportunity.
“Now is the time to respond the world's growing needs by empowering individuals, supporting communities and backing promises with resources,” he told the APEC delegates.
Climate change is intensifying the risk for hundreds and millions of people, and nine out of ten disaster fatalities are in the low and middle income countries, he said.
“In this globalized economy, our world is smaller than ever. An earthquake in one country shakes up financial markets in another…tropical cyclones in one region can cause economic turbulence in another,” he pointed out.
It is a smart option for governments and wise investment for business and households to strengthen resilience against the impact of natural disasters, he said.
Emmanuel Dooc, Philippines Insurance commissioner, said mircro insurance of which the Philippines is a leader in a principal tool in disaster risk mitigation and financial inclusion.
He said he sees insurance as the main tool to promote inclusive growth and an inclusive society.
While typhoon Yolanda wiped out communities and caused so much loss of life, thousands of households benefited from microinsurance coverage in the Philippines totaling P.5 billion, he said.
“Our success story in microinsurance is now well recognized, and the landscape of microinsurance in the Philippines ranked number one among over thirty countries surveyed according to a study done in Munich, “ he said.,
Michael McCord, Microinsurance Network chair, said the Philippines is one of the best examples across the globe of how mircro insurance has helped the poor.
He said of the 66 million people covered by micro insurance among the APEC countries in 2014, 27.9 million were from the Philippines.
The Asia-Pacific region has a large potential for microinsurance which insurers could tap to provide the people the risk management protection they need, McCord said.
Dr. Julius Parrenas, APEC Business Advisory Council delegate and senior advisor of Nomura Securities Co. Ltd, saidthe APEC gathering on disaster risk finance was a very important element of inclusive growth.
“Insurance tends to be an under-appreciated part of the financial sector, because many people only realize its importance after they experience disaster. Yet we know that unfortunate events are an inescapable part of our lives,” he said.
Empowering small and micro enterprises and deepening supply chains to reach the agricultural hinterlands and peripheries of APEC economies require measures to promote resilience against unexpected events and disasters, he said.
Micro insurance and disaster risk finance are tools that will be important for the region's sustained economic growth, he added.*CPG
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