Recovery is defined as “restoring or improving of livelihoods …, as well as economic, physical, social, … and environmental assets, systems and activities, of a (weather-related) disaster-affected community or society, aligning with the principles of sustainable development and ‘build back better’, to avoid or reduce future disaster risk (United Nations General Assembly, 2016)”.
Resilient recovery contains a multitude of activities that can be clustered under the following key steps:
Recovery supports people’s efforts to recover, rebuild and strengthen their resilience. The recovery programming needs to be time-bound and define realistic, appropriate achievements and should be linked to longer-term development (IFRC, 2012).
BBB is an essential concept of resilient recovery aiming to reduce vulnerability and improve living conditions while promoting a more effective and sustainable reconstruction. This can be realized through a variety of measures such as enhancing preparedness, relocating critical facilities to safer areas, integrating DRR into infrastructure improvements, strengthening governance structures, and establishing predictable contingent financing mechanisms including insurance.
The involved institutions are the same as in the ‘response’ phase (Phase 4), with a focus on the ‘lead agency’ for overall coordination. Other actors include the implementing departments at the local level and supporting civil society organizations, the affected communities in cooperation with the (local) private sector, international agencies and the media.
The five steps aim at answering the following key questions
- What is the effect of insurance on resilient recovery programmes (including the BBB concept) − and subsequently on the affected population, the private sector and the government?
- Can insurance provide a chance to improve pre-disaster planning?
SYNERGIES: INSURANCE AND RESILIENT RECOVERY
Stimulating resilient recovery
While Insurance payouts from index products can bridge the financial liquidity gap until other assistance can be obtained (respond programmes), indemnity products can provide funding for including the BBB concept for more resilient reconstruction.
EXAMPLE: Integrated approaches such as the pan-national insurance pool ARC support government efforts to quickly and effectively implement resilient recovery activities. For instance, the contingency plans define delivery mechanisms to the affected poor and vulnerable population, integrated DRM and a monitoring system. These plans are linked to resilient recovery mechanisms, which can facilitate longer-term investments in increasing food security, DRR and climate resilience.
BBB may result in reduced premiums
Insured public buildings and critical infrastructure, when reconstructed according to BBB criteria, could lead to reduced premiums for indemnity insurance products. This, in turn, benefits not only the government but also people living in disaster-prone areas as basic services would not be disrupted for long.
Shorter business interruptions due to insured infrastructure − indirect impact
People along the agricultural value chain can indirectly benefit from government insurance as public infrastructure could be reconstructed faster and better (BBB), resulting in shorter business interruptions for, for example, agricultural traders and the transport sector.
Unlocking opportunities stimulated by insurance
In the ‘Recovery’ phase, governments and individual policyholders could realize that insurance can help lessen the financial repercussions of volatility and create a space for investments and planning at the macro level. Through this channel, insurance can help to ‘unlock opportunities’. At the micro level, insurance contributes to increased savings, could improve creditworthiness, boost economic growth and increase investments in higher-return activities (if complemented by other factors).
EXAMPLE: Public or semi-public insurance providers can play an important role, such as the government-owned insurer Philippine Crop Insurance Corporation that operates with a market-based and a social mandate to provide weather-related insurance cover for various agricultural producers, including subsistence farmers and agricultural SMEs.