Disaster Risk Financing and Insurance (DRFI)

June 04, 2015 > June 05, 2015, Clermont-Ferrand

workshop jointly sponsored by the Ferdi, the Cerdi, the World Bank’s Global Facility for Disaster Reduction and Recovery with support from the United Kingdom’s Department of International Development.

With accelerating climate change, the frequency and severity of extreme climatic events has been growing rapidly, with increasingly costly consequences on human welfare and productive assets.

This has induced developing countries to search for the definition and implementation of disaster risk financing and insurance (DRFI) strategies to allow them to cope with weather shocks in a rapid, predictable, and cost effective fashion. Putting into place ex-ante financial strategies not only allows governments to better respond to shocks, but also helps firms, communities, and households to better manage risk knowing the initiatives that governments will take in responding to disasters with relief and reconstruction programs. These financial strategies are complex to define because they involve a large number of financial instruments. Ex-ante risk financing instruments include financial reserves and calamity funds, budget contingencies and reallocations, contingent debts and emergency loans, risk transfer mechanisms (that include traditional insurance and re-insurance, index-based insurance, and catastrophic bonds), and the use of emergency taxes and borrowing on the domestic and international markets. These strategies are still in their infancy, with exploration of alternative designs and early impact evaluations of existing schemes. The objectives of the FERDI workshop on DRFI are to:

(1) define country needs for social protection against catastrophic risks,

(2) explore theoretically and actuarially how to combine financial products for risk layering,

(3) assess current progress with the use of probabilistic catastrophic risk modeling in defining financial strategies,

(4) characterize empirically the social and economic consequences of extreme weather shocks and paths of recovery at the national and household levels,

(5) evaluate the impact on growth and welfare of existing DRFI schemes,

and (6) assess progress in research and define priorities for future research efforts on DRFI.

The workshop is jointly sponsored by the Ferdi, the Cerdi and by the World Bank’s Global Facility for Disaster Reduction and Recovery with support from the United Kingdom’s Department of International Development.


Les objectifs de l’atelier sur le Financement et l’Assurance des Risques de Désastres Naturels (DRFI) sont :

  • de définir les besoins des pays en matière de protection sociale contre les risques de catastrophes
  • d’explorer de manière théorique et actuarielle comment combiner les produits financiers pour répartir les risques
  • d’évaluer les progrès en matière de modélisation des risques de catastrophe servant à la définition de stratégies financières
  • de caractériser de manière empirique les conséquences économiques et sociales des chocs climatiques et les chemins du relèvement observés au niveau national et au  niveau des ménages.
  • évaluer l’impact sur la croissance et le bien-être des schémas existants de DRFI
  • enfin, évaluer les progrès de la recherche et définir les priorités pour la recherche future en matière de DRFI.
Programme and presentations

Thursday June 4 / Jeudi 4 Juin Introduction : The issue of social protection against catastrophic risks 

Chair: Alain de Janvry (UC Berkeley and FERDI)

9.00 – 9.45

Toward the 2015 United Nations Climate Change Conference in Paris and the Ferdi approach
Patrick Guillaumont, Université d’Auvergne et Président de la Ferdi

Disasters and welfare
Emmanuel Skoufias, The World Bank Group

Risk, insurance, and poverty in DFID’s strategic plan
Peter D’Souza, DFID Session 1: Theory: Financial management of disaster risk 

Chair: Francis Ghesquiere (World Bank/GFDRR)

9.45 – 10.30  

Planning for Disasters
Stefan Dercon and Daniel Clarke, DFID and The World Bank Group/GFDRR

10.30 – 10-45 - Coffee Break

10.45 – 12.15

Ex-ante evaluation of the cost of alternative sovereign DRFI strategies
Richard Poulter, The World Bank Group/GFDRR

The cost of post-disaster budget reallocations
Richard Odoom, Crown Agents

12.15 – 13.30     Lunch / Déjeuner: Océania

Session 2: Shocks and recovery: Modeling and Positive Analyses

Chair: Javier Pereira, World Bank Group

13.30 – 15.45

Utility, Risk, and Demand for Incomplete Insurance: Lab Experiments with Guatemalan Coffee producers
Elisabeth Sadoulet (with Craig McIntosh and Felix Povel), UC Berkeley

The application of a probabilistic catastrophe risk modeling framework to poverty outcomes
Catherine Porter, Heriot Watt University

A resilience indicator as a tool to prioritize and assess disaster risk management and financing policies
Stephane Hallegatte, World Bank Group

15.45 – 16.00 - Coffee break

16.00 – 17.30

The fiscal implications of hurricane strikes in the Caribbean
Eric Strobl, Ecole Polytechnique

Long term consequences of short-run income shocks: Evidence from cyclones in Madagascar
Danamona Adrianarimanana, UC Berkeley

19.30 - Ferdi Dinner Invitation Friday June, 5 / Vendredi 5 Juin 

Session 3: Evaluations of SDRFI experiences

Chair: Oscar Ishizawa, The World Bank Group

9.00 – 10.30

Ex ante risk management and implications for poverty
Emmanuel Skoufias and Ruth Hill, World Bank Group

Expanding or increasing : index-based scalable social protection in Niger
Francesca de Nicola, The World Bank Group

10.30 – 10.45 - Coffee break

10.45 – 12.25 

Insuring Growth: The Impact of Disaster Funds on Economic Development
Alejandro del Valle, Paris School of Economics, Alain de Janvry and Elisabeth Sadoulet (UC Berkeley and FERDI)

Impact evaluation of CADENA in Mexico
Elizabeth Ramirez, UC Berkeley

12.25 – 13.40 - Lunch / Déjeuner, Océania

Session 4 : The Political economy of protection

Chair: Vianney Dequiedt, Cerdi

13.40 – 15.30 

Voter Response to Natural Disaster Aid
Alan Fuchs, World Bank Group

The political economy of sovereign weather risk protection in Mexico
Laura Boudreau, UC Berkeley and World Bank Group/GFDRR

15.30 –16.30 

Round table on priorities for future research

Chair: Emmanuel Skoufias (The World Bank Group)


Francis Ghesquiere, World Bank Group/GFDRR
Peter D’Souza, DFID
Ruth Vargas Hill, The World Bank Group
French Ministry of Finance


Lessons learned and future directions

Daniel Clarke, The World Bank Group/GFDRR