Disaster Risk Insurance Workshop: NDMA & DoFS Emphasize Coverage for All

New Delhi, Sep 20 (PTI) Principal Secretary to the Prime Minister PK Mishra on Friday stressed on providing insurance coverage to all, as envisaged in the prime minister's 10-point agenda for Disaster Risk Reduction that was announced in 2016.

Inaugurating a workshop titled "Why Disaster Risk Insurance Matters" and organised by the National Disaster Management Authority (NDMA) and the Department of Financial Services (DoFS), he said designing such products was difficult but not impossible, stressing the need to understand the element of co-variability, given the diversity of hazards over the regions in India.

According to an NDMA statement, Mishra emphasised the mention of "risk coverage for all" in the prime minister's 10-point agenda for Disaster Risk Reduction that was announced in 2016.

He highlighted the success of PM Fasal Bima Yojana, which was difficult to design since the asset (crop) was yet to be developed -- there being no means of pre-verification of the asset to be insured.

"He was of the view that financial viability of differentiated products was most important for this sector to sustain itself and advised that spreading risk over regions was important, but also over time. His final points included suggestions to industry to understand how to use technology to avoid moral hazards and adverse selection," the statement said.

Union Home Secretary Govind Mohan stressed the importance of integrating insurance into disaster management strategies.

Mohan said the frequency and intensity of disasters had increased and it was becoming clear that traditional models of disaster management were under stress.

"Financial stress, infrastructure damage and loss of livelihoods persist long after the disaster has passed. Hence, disaster risk insurance can provide a much-needed buffer," he said.

He lauded the DoFS and the NDMA's joint initiative to discuss creative solutions, such as parametric insurance, catastrophe bonds and risk pools.

Mohan said there was a need to operationalise disaster insurance in India and encourage states and Union territories to work on initiating such programmes.

Four sessions -- Global and Indian Risk Pool Examples to Design Risk Pools; Integration of Nat Cat Bonds in India's Disaster Risk Finance Profile; Practical Design of Parametric Insurance Products; and Disaster Database for Insurance: Requirements, Design and Architecture were organised.

NDMA member and head of department Rajendra Singh, advisor Safi Ahsan Rizvi, members Dr Krishna S Vatsa and Lt Gen Syed Ata Hasnain, and DoFS Additional Secretary MP Tangirala were among the speakers.