BACOLOD CITY: The Asia-Pacific Economic Cooperation (APEC) could put up a regional insurance facility that can provide insurance cover for any of its 21 member economies that may be struck by a major disaster, a World Bank official said.
Richard Poulter, a specialist on disaster risk financing and insurance from Washington-based World Bank, proposed the concept of a regional insurance facility during an APEC meeting on Disaster Risk Finance held in this city on Thursday.
Poulter said that accessing insurance against disasters may be expensive for a single economy, but the cost can be significantly reduced with economies of scale.
The specialist suggested that APEC economies may pool their disaster risks and then tap insurance collectively from an international insurance provider.
He cited the model that the Philippines is pursuing for some of its provinces, adding this may be applied on a regional scale.
In particular, the Philippines has secured the assistance of the World Bank in developing an insurance framework wherein disaster-prone provinces will pool risks and then have these risks insured collectively.
In case a province is hit by disaster, it can file claims from the insurance facility.
“In so many ways the Philippines has been leading efforts toward [disaster]resiliency, and the model it is pursuing is an example,” Poulter said.
Regional insurance is one of the proposals for disaster resiliency that APEC member-economies may consider discussing in detail in succeeding meetings.
Other proposals raised during the meeting were the establishment of a catalogue showing the risk exposures of member-countries, creation of a platform showing data on insurance coverage of public assets, and private sector engagement in disaster risk financing.
Meantime, the Philippines reiterated the need for a proactive approach toward enhancing disaster resiliency across APEC member-economies.
“The APEC region serves as a growth driver for the world economy.
Given that the region is prone to natural disasters, collective efforts to boost disaster resiliency are vital in ensuring that our region continues to have significant contributions to global growth,” said Finance Undersecretary Gil Beltran, who serves as head of the overall organizing committee for the APEC gathering in the city.
Besides exploring means for the member-economies to access disaster risk financing, participants to the two-day APEC gathering also discussed proposals to widen the penetration of microinsurance.
Given its affordability, microinsurance is seen as an effective tool to protect more people and enterprises against the adverse effects of disasters.