Philippine City Disaster Insurance Pool: Rationale and Design

Description

This report presents the rationale for and design of a city government disaster insurance pool in the Philippines. Insurance pools help governments enhance their financial preparedness for disasters, focusing on the provision of rapid post-disaster financing for early recovery. The Philippine City Disaster Insurance Pool was developed under the guidance of the Department of Finance as part of the 2015 Disaster Risk Financing and Insurance Strategy. It utilizes a parametric insurance structure, basing payouts on the occurrence of earthquakes and typhoons according to their physical features, rather than actual losses. Cover Title Copyright Contents Tables, Figures, and Boxes Abbreviations Acknowledgments EXECUTIVE SUMMARY 1 Introduction 2 Assessing City Disaster Risk Purpose of risk modeling Modeling approach City-level risk profiles 3 Existing City Government Post-Disaster Financing Arrangements, and Needs Overview of existing instruments and actors Use of disaster risk Financing by city government Funding needs at the city level 4 Pool Structuring Selection of the form of insurance Overview and validation of proposed trigger structure Proposed parametric index Proposed legal and administrative structure 5 Premium Pricing and Aor ff dability Costs incurred by insurance providers Reinsurance considerations PCDIP policy proposal Premium affordability and funding sources 6 Benefits of Disaster Insurance Pools 7 Conclusions Key Findings Proposed structural characteristics of PCDIP Proposed policy and premium characteristics of PCDIP Glossary