Working on behalf of the Asian Development Bank (ADB) and CAREC member states we partnered with WTW, GEM and ODI to assess flood and earthquake risk, visualising data in interactive tools to support disaster risk financing (DRF) planning.
The Central Asia Regional Economic Cooperation (CAREC) programme promotes economic growth and resilience across the region, including strategies to manage financial risks from disasters. One approach under consideration is disaster risk financing, which enables countries to transfer a portion of their financial risk to the private sector through reinsurance mechanisms.
Sovereign risk pools have been successfully implemented in other regions, spreading risk across multiple countries much like domestic insurance policies support individuals. This project explored how similar financial protection mechanisms could be applied in Central Asia, covering: Azerbaijan, Georgia, Kazakhstan, Kyrgyz Republic, People’s Republic of China (Autonomous Regions of Inner Mongolia and Xinjiang Uygur), Mongolia, Pakistan, Tajikistan, Turkmenistan and Uzbekistan.
A clear understanding of risk is essential for developing effective DRF strategies. This project used probabilistic flood and earthquake modelling as a foundation for risk assessment. We worked with the Global Earthquake Model Foundation (GEM) to apply our probabilistic risk models to assess hazards at both national and provincial scales. The analysis targeted population impacts and building damage, using exposure and vulnerability data developed within the project.
To provide additional insights, the Overseas Development Institute (ODI) assessed the potential impacts of disasters on specific social groups, helping to ensure that financial protection strategies are inclusive.
As probabilistic modelling is widely used in the insurance sector but can be challenging for non-specialists to interpret, the project also developed deterministic scenarios. These 100-year event scenarios helped visualise realistic worst-case outcomes, making the data more accessible for decision-makers.
Effectively communicating risk was a key focus of the project. A user-friendly graphical interface was developed to support capacity building, allowing stakeholders to explore risk data and identify areas for further action.
In the second phase, the CLIMADA framework was used to assess the potential costs and benefits of adaptation measures. This included evaluating the impact of improved building codes for earthquake resilience and nature-based solutions for flood risk reduction, helping stakeholders explore how different interventions could reduce disaster impacts.
To support decision-making, an interactive disaster risk financing tool was developed. This tool guides users through key steps in designing financial protection mechanisms, allowing them to:
Following engagement with stakeholders through a series of country workshops, the project has laid the groundwork for implementing financial instruments in one or more CAREC countries in the near future.
Contact our team to learn more about this project.
