Assessing the enabling environment for Disaster Risk Financing: A country diagnostics toolkit

This diagnostics toolkit is designed to help countries assess the financial management of disaster risk and to provide a basis for them to enhance financial resilience through insurance and other risk transfer instruments. In the report, the framework examines the state of the enabling environment and incorporates lessons from country diagnostics assessments for Fiji, Nepal, Pakistan, and Sri Lanka.

The framework enables the identification of gaps between international good practice in disaster risk financing and its application in a particular country. It further provides an enhanced understanding of the demand and supply factors shaping the related enabling environment, including potential barriers to the more effective use of disaster risk financing instruments. It explores six critical axes shaping the development of disaster risk transfer instruments:

1. government policy;
2. economic conditions;
3. product appeal;
4. credibility of insurance, reinsurance, and capital market providers;
5. social protection policy; and
6. unlicensed competition.