Africa, Americas, Europe, Asia Pacific

The Centre for Global Disaster Protection must go beyond a focus on finance

Sheri Lim | Jul 26, 2017

This article was originally published on Care Insights and is republished with permission.

After the G20 meeting in Bonn and at the Global Insurance Forum this July, DFID announced its plans for the Centre for Global Disaster Protection, a £30million initiative to support countries and the international humanitarian system to think through how to prepare and plan for risk, and to help governments and humanitarian agencies get support more quickly, reliably and cost-effectively when a natural disaster strikes. But could the Centre have a greater impact by going ‘beyond only finance’?

The Centre for Global Disaster Protection will be based in London and provide technical advice for developing country governments to understand their risks and be better positioned to assess different options to fund their humanitarian efforts. The main focus of the Centre will be on managing ‘residual risk’ (risk that cannot be reduced through mitigation or reduction efforts, such as adaptation activities or disaster risk reduction), particularly through financial products such as insurance.

As a global humanitarian agency that very acutely recognises the challenges within the sector, we welcome DFID’s commitment to support vulnerable countries to improve their ability to deal with disasters – but we urge DFID to think ‘beyond only finance’ if the Centre is to maximise its potential.

Reducing the aid funding gap

Firstly, some media voices have positioned insurance as a way to reduce the aid funding gap – which already this year is significant: the UN Humanitarian Under-Secretary stated in March that $2.1 billion was needed in 2017 to reach 12 million people in Yemen, South Sudan, Somalia and north-eastern Nigeria with life-saving aid, and expressed concern that only 6 per cent of that had been received by that time.

The UK government should still keep its primary focus on maintaining and increasing our commitments to help those facing crises. Insurance is not a replacement for this. Particularly as globally we see more frequent and devastating disasters due to climate change that call for humanitarian assistance, those of us in historically industrialised nations who have contributed the most to the increasing severity and frequency of these disasters should bear more responsibility.

Overcoming delivery delays

Secondly, funds released by risk finance instruments are only as good as the systems set up to deliver humanitarian efforts. If we are able to achieve faster payments to governments through insurance, but the government delays declaring an emergency, or there are delays in release of funds to humanitarian actors and other agencies, or there are no robust plans for rapid response, or local organisations are not engaged in assessing the scale of need on the ground – then faster payments will have little bearing on the success and speed of humanitarian efforts to reduce lives lost and minimise damage.

Of the Africa Risk Capacity payments made to three countries in 2015 (an Africa regional risk pool for index-based insurance), two countries still had delayed responses due to problems in getting funding through government payments systems and procurement of food aid.

Looking at only one part of the equation, ie strengthening the ability of governments to assess their risks and use that to secure the most appropriate financing options – or focusing on the finance – is not enough. There is an opportunity for the Centre to play an advisory and convening role in strengthening country capacity to improve delivery of risk reduction and humanitarian support more broadly – thus orienting the Centre towards improving risk analysis and disaster response planning as the primary outcome, rather than improving these areas so that finance can be accessed.

It may seem like a subtle difference, but it’s one which would put into practice what we all agree on – that the finance is only one part of effective risk management.

Focusing on country needs

Thirdly, the impartiality of the Centre has been called into question – how can we be assured that the Centre’s efforts will not be biased towards generating ready clients for insurance companies or donors’ priorities rather than focusing on country needs?

Starting with a process which engages a wide range of actors from governments to local organisations to determine the most important needs and gaps is a necessary initial step to guide the technical assistance within each country. Ensuring there is representation and involvement from developing countries within the Centre’s structure (as opposed to only UK-based agencies and interests) will demonstrate commitment to broader ownership and neutrality.

Sharing information will multiply impact

Also important is a commitment that the data and analyses from the Centre are openly accessible and shared with a broad range of stakeholders that are involved in minimising, preparing for and responding to humanitarian crises. Risk modelling, scenario planning, weather forecasts, improved disaster prediction and local monitoring capability, anticipatory needs analysis and loss valuations, can benefit the agriculture and health sectors, disaster planning agencies, meteorological agencies, local organisations and communities who can make use of this information to improve their own risk reduction and disaster preparedness actions.

The focus of the Centre’s technical advice then shifts away from benefiting suppliers of financial products to providing direct benefit to a wide range of actors’ initiatives. The Centre’s impact is multiplied by improving overall systems to deliver humanitarian support, which will ultimately also be more attractive for risk financing options.

Ensuring accountability

Finally, as the UK is committed to ensuring aid reaches the poorest, then accountability through regular consultation and monitoring with local organisations and communities affected by crises are needed to continually assess and improve the impact of the Centre’s work. Women who are meant to benefit from these efforts should be involved in this engagement and their needs focused on in all the Centre’s efforts, as women are often worst affected by disasters.

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