Insurance of public buildings
This technical note presents the case of Colombia on implementing a collective, standardized approach to catastrophe insurance of public buildings. It focuses on the technical details of enhancing insurance requirements for public buildings. It outlines the proposed solutions that were delivered to the Ministry of Finance and Public Credit (MHCP) and concludes with lessons learned.
Colombia suffers more than 600 natural disasters a year, the highest rate of recurrent natural disasters in Latin America. In 2010-11, a severe La Niña season revealed that very few of the affected public assets had been properly insured. This reality led the Government of Colombia to develop guidelines on insurance coverage for public assets; the MHCP also identified the need to promote a more effective approach to insure their buildings.
With technical advisory services from the World Bank in the preparation and implementation of an integrated disaster risk financing and insurance (DRFI) strategy, the MHCP identified four priority areas: (i) Develop DRFI policy strategy for the Government of Colombia; (ii) Improve budget management of natural disasters using market-based catastrophe risk transfer solutions; (iii) Improve the insurance program of public assets through a collective strategy to insurance program of public assets; and (iv) Improve requirements for insurance of concessions of transportation infrastructure based on market practice.