Financial protection of critical infrastructure services

This report presents a preliminary operational framework for economies to improve the financial resilience of critical infrastructure services - it builds on existing principles and approaches to disaster risk financing. The report uses the term critical infrastructure to refer to all those aspects required to deliver the critical services (transport, health care, energy). Six sectors are widely classified as being critical: energy, transport, water, information and communications technologies (ICT), health, and finance.

The focus of this report is vital because it is about protecting critical infrastructure services rather than just the underpinning assets. It focuses mainly on disruptions related to natural hazards, such as storms or floods, but also on pandemics; however, disruptions can sometimes result from manmade shocks, such as terrorism and cyber-attacks. Two sources of contingent liability are associated with critical services beyond the cost of the physical assets and are in addition to the potential loss of revenues from the economic disruption:

• Costs for maintaining and reinstating critical services;
• Costs of implicit contingent liabilities.

Bringing those aspects together creates an operational framework for financial protection of critical infrastructure that should combine three interconnected parts:

1. Financial protection of physical assets.
2. Shock-responsive systems that link financial and operational preparedness to ensure rapid recovery of critical services.
3. A national financial protection strategy that integrates critical infrastructure to efficiently manage the contingent liabilities related to such shock-responsive systems.