Garschagen, Matthias

Hagenlocher, Michael

Open Access LMU

DISASTER RISK AND READINESS FOR INSURANCE SOLUTIONSInsuRisk Assessment Report 2018CONTEXTIn 2017, the InsuResilience Secretariat commissioned the United Nations University’s Institute for Environment and Human Security (UNU-EHS) and Social Impact Partners to develop a concept and methodology that provide  transparent and comparable information on countries’ vulnerability towards climate and disaster risks and their readiness to accommodate insurance solutions. Such information is supposed to provide orientation for the prioritization of action within the InsuResilience Global Partnership and tailor support for potential partner  countries. The method has been designed with a view to the goals of the InsuResilience Global Partnership, i.e. to strengthen the resilience of developing countries and to protect the lives and livelihoods of poor and vulnerable people from the impacts of disasters through the use of climate and disaster risk finance and insurance solutions. This will be achieved by developing a global multi-stakeholder community of countries, experts and practitioners working on financial protection. For further information on the InsuResilience Global Partnership please have a look at www.insuresilience.org.  The resulting “Risk and Readiness for Insurance Solutions Assessment Tool” (InsuRisk Assessment Tool) assesses the climate and disaster risk of partner countries as well as  their readiness to accommodate risk insurance and other risk transfer solutions. In line with the pro-poor focus of InsuResilience, the analysis has been focused on low and lower-middle income countries (n = 84). The tool’s modular design allows governments, insurers, implementing partners and researchers to select and combine required information based on their respective needs. A first prototype was released at COP23 in November 2017 in Bonn, Germany. An updated version is presented in this factsheet.The InsuRisk Tool is designed to provide  answers to the following key questions:·  What is the level of vulnerability and climate   and disaster risk of a country? · What is the short-term capacity of a country   to cope with hazardous events? · How high is the remaining residual risk?· Which long-term preventive strategies exist   in a country to tackle future disaster risk?· What is a country’s readiness to   accommodate insurance and other risk    transfer solutions?In order to provide answers to these questions, the InsuRisk Assessment Tool comprises five key components, displayed in Figure 1: (1) climate and disaster risk, (2) short-term coping capacity, (3) residual risk, (4) long-term prevention strategies, and (5) readiness for insurance solutions. Following the definition of the Intergovernmental Panel on Climate Change (IPCC 20141), disaster and climate risk emerges where hazardous events or processes (here: climate-related and other natural 1 IPCC (2014). Climate Change 2014: Impacts, Adaptation, and Vulnerability.   Part A: Global and Sectoral Aspects. Contribution of Working Group II to the   Fifth Assessment Report of the Intergovernmental Panel on Climate Change.   Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA,   1132 pp. CONCEPT AND  METHODOLOGYFig. 1: Conceptual framework of the InsuRisk Assessment tool. The tool consists of five key components: (1) climate and disaster risk, (2) short-term coping capacity, (3) residual risk, (4) long-term prevention strategies, and (5) readiness for insurance solutions.One key innovation of the InsuRisk Assessment Tool in comparison to other risk assessment tools is the systematic consideration of a country’s readiness to accommodate insurance and other risk transfer solutions. The overall readiness of a country consists of three modules: (1) individual readiness, (2) the enabling political environment to attract the insurance industry, and (3) the current development status of a country’s insurance market.  As indicated in the conceptual framework (Fig. 1), each of these five components is represented by key factors  (e.g. poverty, social protection, universal health coverage, etc. for social vulnerability) for which a set of underlying indicators and datasets is considered in the assessment.The InsuRisk Assessment Tool builds on a modular design, where different indicators are aggregated into their respective modules (e.g. short-term coping capacity) and submodules (e.g. individual level vs. national level) for each of the 84 target countries considered. The results of this assessment are index scores for each module and  submodule. These scores range between zero (low) and one (very high). A detailed description of the indicators, data sources, and key methodological steps can be found online (see Imprint).hazards) meet with exposed and vulnerable elements (here: people, agricultural land/economic production, and infrastructure) Coping capacity refers to the capacity of individuals, institutions and governments to cope with hazardous events. It hence presents the short-term capacity to reduce disaster risk to a certain level of residual risk. In contrast, the availability (or lack of) preventive strategies, such as disaster risk reduction (DRR) strategies, preparedness plans or National Adaptation Plans (NAPs) does not immediately influence disaster risk or residual risk today, but rather reflects a country’s capacity and will to manage potential risk in the longer-term future. HaitiCabo Verde Sao Tome& PrincipeSolomon Islands KiribatiVanuatuRESIDUAL RISKsocial | economic | infrastructure (all hazards)0.000 - 0.0930.094 - 0.1860.187 - 0.266Upper-middle & high-income countries0.267 - 0.3630.364 - 0.560No data* classification based on quintile method READINESS individual | enabling environment | insurance industry0.155 - 0.3030.304 - 0.3670.386 - 0.410Upper-middle & high-income countries0.411 - 0.5030.504 - 0.690No data* classification based on quintile method HaitiCabo Verde Sao Tome& PrincipeSolomon Islands KiribatiVanuatuFig. 2: Residual risk (upper panel) vs. readiness for insurance solutions (lower panel). Residual risk considers all hazards, the vulnerability of people, land use/economic production, and infrastructure combined, as well as a country’s coping capacity, while readiness for insurance solutions results from the combination of individual readiness, enabling environment, and the current development status of a country’s insurance market. 2018 UPDATEIn preparation for COP24 in Katowice, Poland, the initial prototype was updated using the most recent high-quality data. Overall, data for 32 out of the total 53 indicators (60%) was updated based on newly available data. Due to enhanced data availability, the 2018 version now also covers Cabo Verde and Kiribati – two countries that were not included in the 2017 version. In consequence, the number of target countries (i.e. low and lower-middle income countries) with ‘no data’ has been reduced from five to three (Micronesia, the Democratic People’s Republic of Korea, and Kosovo). Further, the methodology for index construction was also slightly updated. The 2017 version of the tool used minimum and maximum indicator scores in the normalization process, resulting in relative indicator and index scores for these 84 countries. For the 2018 version, global minimum and maximum values were used for each indicator, thus allowing for changes in the selection of target countries in the future while ensuring that the index scores of the individual countries do not change. This approach facilitates timeline comparisons in the future, in support of tracking countries’ progress towards risk reduction and their improvements in the readiness to accommodate risk transfer solutions. Further details on the above mentioned updates are provided in the supplementary online material (see Imprint).   RESULTSFigure 2  juxtaposes the residual risk of a country (Fig. 2, upper panel) with its readiness to accommodate insurance and other risk transfer solutions (Fig. 2, lower panel). The index scores of these two components of the InsuRisk Assessment Tool are divided into five groups of countries of equal size (quintile method). Lighter colors represent lower index scores, while darker colors indicate higher index scores for both components respectively. The figure shows that countries with a particularly high level of EXPOSUREpeople | land use & GDP | infrastructure (all hazards)* classification based on quintile method 0.000 - 0.2640.265 - 0.4310.432 - 0.605Upper-middle & high-income countries0.606 - 0.8990.900 - 1.000No dataHaitiCabo Verde Sao Tome& PrincipeSolomon Islands KiribatiVanuatuVULNERABILITY social | economic | infrastructure0.303 - 0.4100.411 - 0.4900.491 - 0.570Upper-middle & high-income countries0.571 - 0.6430.644 - 0.777No data* classification based on quintile method HaitiCabo Verde Sao Tome& PrincipeSolomon Islands KiribatiVanuaturesidual risk include Djibouti, Burundi, Vanuatu,  Afghanistan, Madagascar, Rwanda, Papua New Guinea, Haiti, South Sudan, Honduras, Uganda, Eritrea,  Guatemala, Mozambique and Lao PDR. Countries with highest readiness to accommodate insurance and other risk transfer solutions include India, Indonesia, Ukraine,  the Philippines, Morocco, Ghana, Jordan, Mozambique, Nigeria, Kenya, Lesotho, Kyrgyzstan and Bangladesh. Countries with the strongest gaps in readiness include Djibouti, Chad, Eritrea, the Central African Republic, Syria, Rwanda, Burundi, the Comoros, Angola, the Democratic Republic of the Congo, Egypt, the Gambia, Tajikistan, and the Congo. Figure 3 shows exposure (Fig. 3, upper panel) and  vulnerability (Fig. 3, lower panel) as two key components  of risk. Countries with the highest exposure include Vanuatu, Myanmar, the Philippines, Guatemala, Haiti, Honduras, Tajikistan, Madagascar, Djibouti, Afghanistan,  El Salvador, Georgia, Nicaragua, Kyrgyzstan, Armenia, Papua New Guinea and Lao PDR. Countries with the highest vulnerability are all located on the African  continent and include South Sudan, Chad, Malawi,  the Central African Republic, Madagascar, Burundi,  Mozambique, Eritrea, Somalia, the Democratic  Republic of the Congo, Niger, Uganda, Ethiopia,  Angola and Guinea-Bissau.Fig. 3: Exposure (upper panel) vs. vulnerability (lower panel).  Fig. 4: Country profiles contrasting residual risk and hence demand for innovative risk transfer solutions and overall readiness for insurance solutions. With regards to InsuResilience’s focus on providing insurance solutions to those most at risk, Figure 4 plots a country’s residual risk against its readiness for insurance solutions (i.e. the combination of individual readiness, enabling environment and the current state of insurance). Such analysis allows for developing country profiles and tailoring support according to the specific situation of a country. Figure 4, for example, allows to identify those countries where a very high residual risk concurs with a particularly grave lack of readiness to accommodate risk transfer solutions (e.g. Djibouti, Burundi, Eritrea and Rwanda). At the same time, countries can be identified in which high residual risk concurs with a comparatively high readiness for insurance solutions (e.g. the Philippines, Mozambique or Indonesia).In addition to providing comparative information on  the target countries’ residual risk and readiness for risk transfer solutions on a global scale, more detailed country profiles have been developed which offer more detailed information on individual countries. Figure 5 shows an example of such a country profile (here: Sri Lanka).residual risk concurs with a particularly grave lack of readiness to accommodate risk transfer solutions (e.g. Djibouti, Burundi, Eritrea and Rwanda). At the same, countries can be identified in which high residual risk meets with a comparatively high readiness for insurance solutions (e.g. the Philippines, Mozambique or Indonesia).  Fig. 4: Country profiles contrasting residual risk and hence demand for innovative risk transfer solutions and overall readiness for insurance solutions.  DjiboutiBurundiAfghanistanMadagascarMyanmarRwandaPapua New GuineaHaitiHondurasUgandaEritreaMozambiquePhilippinesTanzaniaEl SalvadorPakistanBangladeshLiberiaSyriaLesothoUzbekistanTajikistanC.A.R.MalawiD.R.CIndonesiaNicaraguaViet NamAngolaArmeniaTimor-LesteKyrgyzstanZambiaJordanMoroccoNepalBoliviaZimbabweKenyaCambodiaIndiaPalestineYemenBeninGuineaSri LankaTogoNiger CameroonMoldovaChadGhanaCôte d'IvoireSudan CongoNigeriaBhutanComoros MongoliaMaliMauritaniaUkraineGambiaBurkina FasoEgyptSenegalCabo Verde0,1550,2620,3690,4760,5830,6900,000 0,112 0,224 0,336 0,448 0,560Readiness(individual | enabling environment | insurance market)Residual risk (social | economic | infrastructure) - all hazards Readiness (individual | enabling environment |  insurance industry)Residual risk  (s ci l | c no ic | infrastructure) - all hazards.0.583. 670.369..0.112 0.224 0.336 0.448 0.0.000Fig. 5: Selected country profile (here: Sri Lanka) based on the updated InsuRisk Assessment Tool. SRI  LANKAINDIA BANGLADESH Country overviewPopulation (2018) 20,950,0411Annual rate of population change (2010-2015)+0.50 %1 World Bank income classificiationLower middle income2GDP per capita, ppp (current international $, 2017) $12,8113GDP per capita growth (% annual, 2017) +2.0 %3VulnerabilitySri LankaCountry profile for disaster risk and readiness for insurance solutionsInsurance industrynumber of primary non-life insurersmarket penetrationinsurance premium volumeplacement  by brokersmarket  concentration1.000.750.500.250.00social factorsundernutritionpoor housing qualitydependency  ratiolacking financial  health protectionlacking access  to essential  health serviceslack of social protection1.000.750.500.250.00Residual riskexposurevulnerabilityriskshort-term coping0.530.370.200.19Overall residual risk0.16no riskvery high risk0.05 0.15 0.25 0.350 >0.351 UN-DESA, World Population Prospects 2017 (https://population.un.org/wpp/).2 WorldBank, Country and Lending Groups (https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups).3 WorldBank, Open Data (https://data.worldbank.org).According to the 2018 version of the InsuRisk Assessment Tool, and based on a quintile classification of the results as shown in Figure 2, Sri Lanka is characterized by medium residual risk (0.16 on a scale from 0 to 0.56) and high readiness for insurance solutions (0.49 on a scale from 0 to 0.69).  The country has a high exposure to multiple hazards, notably floods, droughts and storm surges, and medium overall vulnerability. Low GDP per capita, lack of social and financial health protection as well as fresh water scarcity are key drivers of vulnerability.Readiness for insurance solutionsindividual levelenabling environmentinsurance industry0.590.650.24Overall readiness0.490.2 0.4 0.6 0.8no readinessvery high readiness0 1environmental & infrastructural factorslack of access to informationlack of access  to electricitylack of access  to irrigationfreshwater scarcitysoil infertility1.000.750.500.250.00GDP per capita (inverted)GINI indexdependency on  primary sectorremittances (inverted)economic factorspoverty1.000.750.500.250.00CONCLUSIONS AND OUTLOOKHaving presented and reviewed the InsuRisk Tool prototype and its indicative outcomes at COP23 in Bonn  in 2017, an updated version has been developed taking into consideration inputs from InsuResilience  partners and stakeholders as well as the most recent data. Governments and implementing partners can use the tool to get an overview of the risk and readiness situation both across countries and within a specific country. Drawing on its modular structure, the tool also provides information on relevant drivers of risk and readiness for insurance solutions, and hence can support partners in identifying targeted solutions to reduce disaster risk and enhance readiness. Insurers can use the tool to get an overview of the current development status of the insurance market in a country. Future plans include the development of an interactive online tool, allowing for detailed and user-driven  analysis of the different modules and submodules covered by the tool. Further, special reports focusing on  hot topics related to InsuResilience are planned for the future, drawing on the analytical capabilities of the tool. As the InsuResilience Secretariat is currently setting up a monitoring and evaluation (M&E) system, the InsuRisk Assessment tool can also make a valuable contribution to the monitoring and impact evaluation of the efforts to reduce risk and implement risk transfer solutions in InsuResilience partner countries. By assessing changes in the tool’s five key components and their underlying indicators on a regular basis (e.g. every three years) potential changes can be identified in a systematic manner.IMPRINT Publisher:United Nations University – Institute for Environment and Human Security (UNU-EHS), Federal Ministry for Economic Cooperation and Development (BMZ) and Deutsche  Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Scientific leadDr. Matthias Garschagen, UNU-EHS Dr. Michael Hagenlocher, UNU-EHSConcept:Dr. Matthias Garschagen, UNU-EHSDr. Michael Hagenlocher, UNU-EHSDr. Astrid Zwick, GIZManuel Holzhauer, SIPLena Klockeman, GIZDelia Kaiser, GIZAuthors:Dr. Michael Hagenlocher, UNU-EHSDr. Matthias Garschagen, UNU-EHSAcknowledgements:The authors would like to thank Dominic Sett and Jonathan Reith for their invaluable support with data collection and cleaning. Further, the authors would like to acknowledge the support of Axco Insurance Information Services Ltd and Social Impact Partners for providing data on the insurance industry component of the tool. As of November 2018 Printed by PaffenholzPhoto credits © UNICEF/Manuel Moreno Gonzalez, cover; © UNICEF/Thomas Nybo, page 2, top; © UNICEF/Samir Jung Thapa, page 2, bottom; © UNICEF/Mulugeta Ayene, page 10.UNU-EHS and GIZ are responsible for the content of this publication. The InsuResilience Secretariat commissioned this product as an independent scientific input for the InsuResilience initiative. The content does not reflect any political views of the InsuResilience partners.Online:A detailed description of the methodology  (incl. indicators and data sources) is available at  http://collections.unu.edu/view/UNU:6672 Connect with UNU-EHS:Website: www.ehs.unu.edu @unuehs, twitter.com/unuehs facebook.com/unuehs linkedin.com/company/unu-ehs  @unuehsSupported by

Disaster risk and readiness for insurance solutions

Universität München: Elektronischen Publikationen

DISASTER RISK AND READINESS 
FOR INSURANCE SOLUTIONS
InsuRisk Assessment Report 2018
CONTEXT
In 2017, the InsuResilience Secretariat commissioned the 
United Nations University’s Institute for Environment and 
Human Security (UNU-EHS) and Social Impact Partners to 
develop a concept and methodology that provide  
transparent and comparable information on countries’ 
vulnerability towards climate and disaster risks and their 
readiness to accommodate insurance solutions. Such 
information is supposed to provide orientation for the 
prioritization of action within the InsuResilience Global 
Partnership and tailor support for potential partner  
countries. The method has been designed with a view to 
the goals of the InsuResilience Global Partnership, i.e. to 
strengthen the resilience of developing countries and to 
protect the lives and livelihoods of poor and vulnerable 
people from the impacts of disasters through the use of 
climate and disaster risk finance and insurance solutions. 
This will be achieved by developing a global multi-stakeholder 
community of countries, experts and practitioners working 
on financial protection. For further information on the 
InsuResilience Global Partnership please have a look at 
www.insuresilience.org.  
The resulting “Risk and Readiness for Insurance Solutions 
Assessment Tool” (InsuRisk Assessment Tool) assesses the 
climate and disaster risk of partner countries as well as  
their readiness to accommodate risk insurance and other 
risk transfer solutions. In line with the pro-poor focus of 
InsuResilience, the analysis has been focused on low and 
lower-middle income countries (n = 84). The tool’s modular 
design allows governments, insurers, implementing partners 
and researchers to select and combine required information 
based on their respective needs. A first prototype was 
released at COP23 in November 2017 in Bonn, Germany. 
An updated version is presented in this factsheet.
The InsuRisk Tool is designed to provide  
answers to the following key questions:
·  What is the level of vulnerability and climate  
 and disaster risk of a country? 
· What is the short-term capacity of a country  
 to cope with hazardous events? 
· How high is the remaining residual risk?
· Which long-term preventive strategies exist  
 in a country to tackle future disaster risk?
· What is a country’s readiness to  
 accommodate insurance and other risk   
 transfer solutions?
In order to provide answers to these questions, the 
InsuRisk Assessment Tool comprises five key components, 
displayed in Figure 1: (1) climate and disaster risk, (2) 
short-term coping capacity, (3) residual risk, (4) long-term 
prevention strategies, and (5) readiness for insurance 
solutions. Following the definition of the 
Intergovernmental Panel on Climate Change (IPCC 20141), 
disaster and climate risk emerges where hazardous events 
or processes (here: climate-related and other natural 
1 IPCC (2014). Climate Change 2014: Impacts, Adaptation, and Vulnerability.  
 Part A: Global and Sectoral Aspects. Contribution of Working Group II to the  
 Fifth Assessment Report of the Intergovernmental Panel on Climate Change.  
 Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA,  
 1132 pp. 
CONCEPT AND  
METHODOLOGY
Fig. 1: Conceptual framework of the InsuRisk Assessment tool. The tool consists of five key components: (1) climate and disaster risk, 
(2) short-term coping capacity, (3) residual risk, (4) long-term prevention strategies, and (5) readiness for insurance solutions.
One key innovation of the InsuRisk Assessment Tool in 
comparison to other risk assessment tools is the systematic 
consideration of a country’s readiness to accommodate 
insurance and other risk transfer solutions. The overall 
readiness of a country consists of three modules: (1) 
individual readiness, (2) the enabling political environment 
to attract the insurance industry, and (3) the current 
development status of a country’s insurance market.  
As indicated in the conceptual framework (Fig. 1), each of 
these five components is represented by key factors  
(e.g. poverty, social protection, universal health coverage, 
etc. for social vulnerability) for which a set of underlying 
indicators and datasets is considered in the assessment.
The InsuRisk Assessment Tool builds on a modular design, 
where different indicators are aggregated into their 
respective modules (e.g. short-term coping capacity) and 
submodules (e.g. individual level vs. national level) for 
each of the 84 target countries considered. The results of 
this assessment are index scores for each module and  
submodule. These scores range between zero (low) and 
one (very high). A detailed description of the indicators, 
data sources, and key methodological steps can be found 
online (see Imprint).
hazards) meet with exposed and vulnerable elements 
(here: people, agricultural land/economic production, and 
infrastructure) Coping capacity refers to the capacity of 
individuals, institutions and governments to cope with 
hazardous events. It hence presents the short-term 
capacity to reduce disaster risk to a certain level of residual 
risk. In contrast, the availability (or lack of) preventive 
strategies, such as disaster risk reduction (DRR) strategies, 
preparedness plans or National Adaptation Plans (NAPs) 
does not immediately influence disaster risk or residual risk 
today, but rather reflects a country’s capacity and will to 
manage potential risk in the longer-term future. 
Haiti
Cabo Verde 
Sao Tome
& Principe
Solomon 
Islands Kiribati
Vanuatu
RESIDUAL RISK
social | economic | infrastructure (all hazards)
0.000 - 0.093
0.094 - 0.186
0.187 - 0.266
Upper-middle & 
high-income countries
0.267 - 0.363
0.364 - 0.560
No data
* classification based on quintile method 
READINESS 
individual | enabling environment | insurance industry
0.155 - 0.303
0.304 - 0.367
0.386 - 0.410
Upper-middle & 
high-income countries
0.411 - 0.503
0.504 - 0.690
No data
* classification based on quintile method 
Haiti
Cabo Verde 
Sao Tome
& Principe
Solomon 
Islands Kiribati
Vanuatu
Fig. 2: Residual risk (upper panel) vs. readiness for insurance solutions (lower panel). Residual risk considers all hazards, the vulnerability of people, land use/
economic production, and infrastructure combined, as well as a country’s coping capacity, while readiness for insurance solutions results 
from the combination of individual readiness, enabling environment, and the current development status of a country’s insurance market. 
2018 UPDATE
In preparation for COP24 in Katowice, Poland, the 
initial prototype was updated using the most 
recent high-quality data. Overall, data for 32 out 
of the total 53 indicators (60%) was updated 
based on newly available data. Due to enhanced 
data availability, the 2018 version now also covers 
Cabo Verde and Kiribati – two countries that were 
not included in the 2017 version. In consequence, 
the number of target countries (i.e. low and 
lower-middle income countries) with ‘no data’ has 
been reduced from five to three (Micronesia, the 
Democratic People’s Republic of Korea, and 
Kosovo). Further, the methodology for index 
construction was also slightly updated. The 2017 
version of the tool used minimum and maximum 
indicator scores in the normalization process, 
resulting in relative indicator and index scores for 
these 84 countries. For the 2018 version, global 
minimum and maximum values were used for 
each indicator, thus allowing for changes in the 
selection of target countries in the future while 
ensuring that the index scores of the individual 
countries do not change. This approach facilitates 
timeline comparisons in the future, in support of 
tracking countries’ progress towards risk reduction 
and their improvements in the readiness to 
accommodate risk transfer solutions. Further 
details on the above mentioned updates are 
provided in the supplementary online material 
(see Imprint).   
RESULTS
Figure 2  juxtaposes the residual risk of a country (Fig. 2, 
upper panel) with its readiness to accommodate insurance 
and other risk transfer solutions (Fig. 2, lower panel). The 
index scores of these two components of the InsuRisk 
Assessment Tool are divided into five groups of countries 
of equal size (quintile method). Lighter colors represent 
lower index scores, while darker colors indicate higher 
index scores for both components respectively. The figure 
shows that countries with a particularly high level of 
EXPOSURE
people | land use & GDP | infrastructure (all hazards)
* classification based on quintile method 
0.000 - 0.264
0.265 - 0.431
0.432 - 0.605
Upper-middle & 
high-income countries
0.606 - 0.899
0.900 - 1.000
No data
Haiti
Cabo Verde 
Sao Tome
& Principe
Solomon 
Islands Kiribati
Vanuatu
VULNERABILITY 
social | economic | infrastructure
0.303 - 0.410
0.411 - 0.490
0.491 - 0.570
Upper-middle & 
high-income countries
0.571 - 0.643
0.644 - 0.777
No data
* classification based on quintile method 
Haiti
Cabo Verde 
Sao Tome
& Principe
Solomon 
Islands Kiribati
Vanuatu
residual risk include Djibouti, Burundi, Vanuatu,  
Afghanistan, Madagascar, Rwanda, Papua New Guinea, 
Haiti, South Sudan, Honduras, Uganda, Eritrea,  
Guatemala, Mozambique and Lao PDR. Countries with 
highest readiness to accommodate insurance and other 
risk transfer solutions include India, Indonesia, Ukraine,  
the Philippines, Morocco, Ghana, Jordan, Mozambique, 
Nigeria, Kenya, Lesotho, Kyrgyzstan and Bangladesh. 
Countries with the strongest gaps in readiness include 
Djibouti, Chad, Eritrea, the Central African Republic, Syria, 
Rwanda, Burundi, the Comoros, Angola, the Democratic 
Republic of the Congo, Egypt, the Gambia, Tajikistan, 
and the Congo. 
Figure 3 shows exposure (Fig. 3, upper panel) and  
vulnerability (Fig. 3, lower panel) as two key components  
of risk. Countries with the highest exposure include 
Vanuatu, Myanmar, the Philippines, Guatemala, Haiti, 
Honduras, Tajikistan, Madagascar, Djibouti, Afghanistan,  
El Salvador, Georgia, Nicaragua, Kyrgyzstan, Armenia, 
Papua New Guinea and Lao PDR. Countries with the 
highest vulnerability are all located on the African  
continent and include South Sudan, Chad, Malawi,  
the Central African Republic, Madagascar, Burundi,  
Mozambique, Eritrea, Somalia, the Democratic  
Republic of the Congo, Niger, Uganda, Ethiopia,  
Angola and Guinea-Bissau.
Fig. 3: Exposure (upper panel) vs. vulnerability (lower panel). 
 Fig. 4: Country profiles contrasting residual risk and hence demand for innovative risk transfer solutions and overall readiness for insurance solutions. 
With regards to InsuResilience’s focus on providing 
insurance solutions to those most at risk, Figure 4 plots a 
country’s residual risk against its readiness for insurance 
solutions (i.e. the combination of individual readiness, 
enabling environment and the current state of insurance). 
Such analysis allows for developing country profiles and 
tailoring support according to the specific situation of a 
country. Figure 4, for example, allows to identify those 
countries where a very high residual risk concurs with a 
particularly grave lack of readiness to accommodate risk 
transfer solutions (e.g. Djibouti, Burundi, Eritrea and 
Rwanda). At the same time, countries can be identified in 
which high residual risk concurs with a comparatively high 
readiness for insurance solutions (e.g. the Philippines, 
Mozambique or Indonesia).
In addition to providing comparative information on  
the target countries’ residual risk and readiness for risk 
transfer solutions on a global scale, more detailed country 
profiles have been developed which offer more detailed 
information on individual countries. Figure 5 shows an 
example of such a country profile (here: Sri Lanka).
residual risk concurs with a particularly grave lack of readiness to accommodate risk transfer 
solutions (e.g. Djibouti, Burundi, Eritrea and Rwanda). At the same, countries can be identified in 
which high residual risk meets with a comparatively high readiness for insurance solutions (e.g. 
the Philippines, Mozambique or Indonesia).  
Fig. 4: Country profiles contrasting residual risk and hence demand for innovative risk transfer 
solutions and overall readiness for insurance solutions.  
Djibouti
Burundi
Afghanistan
Madagascar
Myanmar
Rwanda
Papua New Guinea
Haiti
Honduras
Uganda
Eritrea
Mozambique
Philippines
Tanzania
El Salvador
Pakistan
Bangladesh
Liberia
Syria
Lesotho
Uzbekistan
Tajikistan
C.A.R.
Malawi
D.R.C
Indonesia
Nicaragua
Viet Nam
Angola
Armenia
Timor-Leste
Kyrgyzstan
Zambia
Jordan
Morocco
Nepal
Bolivia
Zimbabwe
Kenya
Cambodia
India
Palestine
Yemen
Benin
Guinea
Sri Lanka
Togo
Niger 
Cameroon
Moldova
Chad
Ghana
Côte d'Ivoire
Sudan 
Congo
Nigeria
Bhutan
Comoros 
Mongolia
Mali
Mauritania
Ukraine
Gambia
Burkina Faso
Egypt
Senegal
Cabo Verde
0,155
0,262
0,369
0,476
0,583
0,690
0,000 0,112 0,224 0,336 0,448 0,560
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en
t 
|  i
ns
ur
an
ce
 in
d
us
tr
y)
Residual risk  (s ci l | c no ic | infrastructure) - all hazards
.
0.583
. 67
0.369
.
.
0.112 0.224 0.336 0.448 0.0.000
Fig. 5: Selected country profile (here: Sri Lanka) based on the updated InsuRisk Assessment Tool. 
SRI  
LANKA
INDIA 
BANGLADESH 
Country overview
Population (2018) 
20,950,0411
Annual rate of population change (2010-2015)
+0.50 %1 
World Bank income classificiation
Lower middle income2
GDP per capita, ppp (current international $, 2017) 
$12,8113
GDP per capita growth (% annual, 2017) 
+2.0 %3
Vulnerability
Sri Lanka
Country profile for disaster risk and readiness for insurance solutions
Insurance industry
number of primary 
non-life insurers
market 
penetration
insurance 
premium volume
placement  
by brokers
market  
concentration
1.00
0.75
0.50
0.25
0.00
social factors
undernutrition
poor housing 
quality
dependency 
 ratio
lacking financial  
health protection
lacking access  
to essential  
health services
lack of social protection
1.00
0.75
0.50
0.25
0.00
Residual risk
exposure
vulnerability
risk
short-term coping
0.53
0.37
0.20
0.19
Overall residual risk
0.16
no 
risk
very 
high risk
0.05 0.15 0.25 0.35
0 >0.35
1 UN-DESA, World Population Prospects 2017 (https://population.un.org/wpp/).
2 WorldBank, Country and Lending Groups (https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups).
3 WorldBank, Open Data (https://data.worldbank.org).
According to the 2018 version of the InsuRisk Assessment 
Tool, and based on a quintile classification of the results as 
shown in Figure 2, Sri Lanka is characterized by medium 
residual risk (0.16 on a scale from 0 to 0.56) and high readiness 
for insurance solutions (0.49 on a scale from 0 to 0.69).  
The country has a high exposure to multiple hazards, 
notably floods, droughts and storm surges, and medium 
overall vulnerability. Low GDP per capita, lack of social and 
financial health protection as well as fresh water scarcity are 
key drivers of vulnerability.
Readiness for insurance solutions
individual level
enabling environment
insurance industry
0.59
0.65
0.24
Overall readiness
0.49
0.2 0.4 0.6 0.8
no 
readiness
very high 
readiness0 1
environmental & infrastructural factors
lack of access 
to information
lack of access 
 to electricity
lack of access  
to irrigation
freshwater 
scarcity
soil infertility
1.00
0.75
0.50
0.25
0.00
GDP per capita 
(inverted)
GINI index
dependency on  
primary sector
remittances 
(inverted)
economic factors
poverty
1.00
0.75
0.50
0.25
0.00

CONCLUSIONS AND OUTLOOK
Having presented and reviewed the InsuRisk Tool prototype and its indicative outcomes at COP23 in Bonn  
in 2017, an updated version has been developed taking into consideration inputs from InsuResilience  
partners and stakeholders as well as the most recent data. Governments and implementing partners can 
use the tool to get an overview of the risk and readiness situation both across countries and within a specific 
country. Drawing on its modular structure, the tool also provides information on relevant drivers of risk and 
readiness for insurance solutions, and hence can support partners in identifying targeted solutions to reduce 
disaster risk and enhance readiness. Insurers can use the tool to get an overview of the current development 
status of the insurance market in a country. 
Future plans include the development of an interactive online tool, allowing for detailed and user-driven  
analysis of the different modules and submodules covered by the tool. Further, special reports focusing on  
hot topics related to InsuResilience are planned for the future, drawing on the analytical capabilities of the 
tool. As the InsuResilience Secretariat is currently setting up a monitoring and evaluation (M&E) system, the 
InsuRisk Assessment tool can also make a valuable contribution to the monitoring and impact evaluation of 
the efforts to reduce risk and implement risk transfer solutions in InsuResilience partner countries. By assessing 
changes in the tool’s five key components and their underlying indicators on a regular basis (e.g. every three 
years) potential changes can be identified in a systematic manner.
IMPRINT 
Publisher:
United Nations University – Institute for Environment and 
Human Security (UNU-EHS), Federal Ministry for Economic 
Cooperation and Development (BMZ) and Deutsche  
Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH 
Scientific lead
Dr. Matthias Garschagen, UNU-EHS 
Dr. Michael Hagenlocher, UNU-EHS
Concept:
Dr. Matthias Garschagen, UNU-EHS
Dr. Michael Hagenlocher, UNU-EHS
Dr. Astrid Zwick, GIZ
Manuel Holzhauer, SIP
Lena Klockeman, GIZ
Delia Kaiser, GIZ
Authors:
Dr. Michael Hagenlocher, UNU-EHS
Dr. Matthias Garschagen, UNU-EHS
Acknowledgements:
The authors would like to thank Dominic Sett and Jonathan 
Reith for their invaluable support with data collection and 
cleaning. Further, the authors would like to acknowledge 
the support of Axco Insurance Information Services Ltd and 
Social Impact Partners for providing data on the insurance 
industry component of the tool. 
As of November 2018 
Printed by Paffenholz
Photo credits 
© UNICEF/Manuel Moreno Gonzalez, cover; 
© UNICEF/Thomas Nybo, page 2, top; 
© UNICEF/Samir Jung Thapa, page 2, bottom; 
© UNICEF/Mulugeta Ayene, page 10.
UNU-EHS and GIZ are responsible for the content of this 
publication. The InsuResilience Secretariat commissioned 
this product as an independent scientific input for the 
InsuResilience initiative. The content does not reflect any 
political views of the InsuResilience partners.
Online:
A detailed description of the methodology  
(incl. indicators and data sources) is available at  
http://collections.unu.edu/view/UNU:6672 
Connect with UNU-EHS:
Website: www.ehs.unu.edu
 @unuehs, twitter.com/unuehs
 facebook.com/unuehs
 linkedin.com/company/unu-ehs
 
 @unuehs
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Disaster risk and readiness for insurance solutions

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