The governments of Japan and Singapore will work with the World Bank to establish an insurance scheme against natural disasters in Asian countries, as catastrophe losses mount in the region.
According to a report by Nikkei, the scheme could be operational by spring 2020, and Myanmar and Laos will be the first buyers of the insurance. The two countries will pay a combined premium of US$20 million to insure bridges, piers and other public infrastructure from damage caused by natural disasters. Neighbouring Cambodia is also considering joining the framework, the report said.
Singapore-based Southeast Asia Disaster Risk Insurance Facility will handle the framework’s administrative aspects, while the Japanese and Singaporean governments will provide support. The World Bank will help calculate payouts, and will utilise satellite photos and other tools to evaluate damage, acting as a failsafe, in case local communication networks go down due to the disaster.
The framework targets low-income countries with few options for insurance from the private sector. It may eventually be extended to middle-income countries in the region. Several countries in that category, namely Vietnam, the Philippines, and Indonesia, have signified interest in joining.
The insurance will also help foreign businesses that operate in the region, as many have factories and other facilities that could be drastically affected by natural disasters, especially if public infrastructure suffers critical damage.
