Disaster Risk Financing and Insurance (DRFI) Program

The financial losses caused by natural disasters continue to rise, and developing countries experience the greatest impacts. Natural disasters generate significant fiscal risk and create major budget volatility. Even countries with robust disaster risk management programs can still be highly exposed to the economic and fiscal shocks caused by major disasters. The Disaster Risk Financing and Insurance Program (DRFIP) helps countries ensure that their populations are financially protected in the event of a disaster. Through funding and expertise, DRFI supports countries to develop and implement tailored financial protection strategies that increase the ability of national and local governments, homeowners, businesses, agricultural producers, and low income populations to respond more quickly and resiliently to disasters. 

What We Do

DRFIP is a leading partner of developing countries seeking to develop and implement comprehensive financial protection strategies. A joint initiative of the World Bank Group’s Finance and Markets Global Practice and the Global Facility for Disaster Reduction and Recovery (GFDRR), DRFI was established in 2010 to improve the financial resilience of governments, businesses, and households against natural disasters.

The initiative supports governments to implement comprehensive financial protection strategies, and brings together sovereign disaster risk financing, agricultural insurance, property catastrophe risk insurance, and scalable social protection programs. Often, it also helps governments work with the private sector to facilitate public-private partnerships.

How We Work

The DRFIP works through four main areas to help increase the ability of national and local governments, homeowners, businesses, agricultural producers, and low-income populations to respond more quickly and resiliently to disasters: 

  1. Sovereign Disaster Risk Finance: Increases the financial response capacity of national and subnational governments to meet post-disaster funding needs without compromising fiscal balances and development objectives.
  2. Market Development: Strengthens governments’ ability to implement policy measures for creating an enabling environment for private market development that contributes to greater financial resilience against disasters.
  3. Analytics: Strengthens the capacity of governments to take informed decisions on disaster risk finance, based on sound financial/actuarial analysis
  4. Knowledge Management & Global Partnerships: Supports stakeholders with information that will lead to and inform actions in support of building financial resilience. 


Last Updated: Dec 16, 2015


Donors support the Disaster Risk Financing and Insurance (DRFI) program in its work to help vulnerable countries improve financial resilience against climate and disaster risk. DRFI is grateful to the following donors and partners who make its work possible:

Government of Switzerland - Swiss State Secretariat for Economic Affairs

The Swiss State Secretariat for Economic Affairs SECO is a major supporter of DRFI. The Sovereign Disaster Risk Financing and Insurance Program for Middle-Income Countries is a partnership between the World Bank and SECO that aims to reduce the financial vulnerability of these states to natural disasters. This program helps middle-income country governments improve their financial response capacity in the aftermath of a natural disaster while protecting their long-term fiscal balances.

Government of Japan

The Government of Japan is an active supporter of DRFI. The Pacific Disaster Risk Financing and Insurance Program is supported by the Government of Japan for a period of four years. Presently, the Disaster Risk Financing and Insurance Program and the Government of Japan are collaborating to provide technical assistance to the Pacific Island countries (PICs) and to finance the establishment of a disaster risk insurance pilot program.

Government of the Netherlands - Ministry of Foreign Affairs

The Government of Netherlands, through its Ministry of Foreign Affairs, is a long-standing partner of DRFI on the Agricultural Insurance Development Program (AIDP). The Netherlands Ministry of Foreign Affairs is an established leader in promoting sustainable agricultural risk management in developing countries. AIDP is part of a broader Swiss-Dutch-World Bank partnership on agricultural risk management.

United Kingdom - Department for International Development (DFID)

The United Kingdom’s Department for International Development (DFID) is a key supporter of DRFI's broad agenda to build disaster financial resilience in vulnerable countries. In a project managed by the DRFI program, DFID, the World Bank, and GFDRR have partnered to improve the evidence base for sovereign DRFI and develop new and innovative ways of managing risk.

United States – U.S. Agency for International Development (USAID)

The United States government, through USAID, is a key supporter of DRFI. USAID and DRFI partner on a number of activities critical to the program’s mission.   

ACP-EU Natural Disaster Risk Reduction Program

The ACP-EU Natural Disaster Risk Reduction Program (ACP-EU NDRR), an initiative of the African, Caribbean, and Pacific Group of States that is funded by the European Union and managed by GFDRR, strives to help ACP countries reduce their vulnerability to disaster and climate risk and supports disaster risk management activities. It is an ongoing supporter of DRFI activities.


Collaborations are critical to allow the Disaster Risk Insurance and Financing Initiative (DRFI) to develop and implement innovative instruments and tools that help mitigate the financial risk of natural disasters to vulnerable countries. DRFI works with a range of partners, including the private sector, technical experts, development institutions, and civil society organizations, as well as across the World Bank Group.

  • Disaster Risk Financing and Insurance Program (DRFIP) in Finance and Markets GP leads the disaster risk finance dialogue with clients regarding the financial impact of natural disaster risks and helps countries design and implement comprehensive disaster risk financing strategies;
  • Disaster Risk Management (DRM) in Social, Urban, Rural and Resilience GP leads disaster risk management dialogue with clients in collaboration with sector colleagues and specialists to define vulnerabilities and programs for disaster risk management, including prevention and risk reduction.
  • Treasury (TRE) leads the dialogue with the capital and reinsurance markets, structures and executes the financial transactions for the clients;
  • Global Facility for Disaster Reduction and Recovery (GFDRR) hosted by the World Bank within the Climate Change CCSA convenes development partners, provides grants and seed financing to enable the engagement with clients and the technical studies and knowledge solutions to help define the disaster risk management framework.

By linking financial protection to prevention and risk reduction, DRFI’s partnerships have helped unlock innovative financial solutions to support vulnerable countries.  In addition, These partnerships help provide advisory services for project preparation and implementation, advocate for the incorporation of disaster risk financing policy dialogue, share country experiences, build analytical tools, develop approaches for strengthening institutions, disseminate lessons learned and good practices, and mobilize resources required to respond to country demand, among other roles.

GFDRR and DRFI Partnership for Financial Protection

DRFI operates in partnership with the Global Facility for Disaster Reduction and Recovery (GFDRR) to help countries enhance their financial response capacity for greater overall financial resilience to natural disasters. GFDRR is a global partnership, managed by the World Bank, and provides grant financing and technical assistance to help vulnerable countries mainstream disaster and climate risk management.

Together, GFDRR and DRFI support the development of public-private partnerships (PPPs) to improve the supply and demand of property and agricultural catastrophe risk insurance solutions and strengthen domestic catastrophe risk insurance markets. They also engage on knowledge management and capacity building institutions at all levels of government, as well as high-level policy advisory work. 

Partnerships for Innovative Financial Solutions

The DRFI program regularly turns to private sector expertise to help develop and implement innovative financial solutions. Commercial partners include risk modeling firms, local and global insurance companies, reinsurance companies, investment banks, funds, and asset management companies.

In addition, DRFI closely collaborates with development partners and international financial institutions, as well as bilateral and multilateral development partners, including regional development banks. Key external partners include UN agencies, specifically UNISDR and the World Food Programme. DRFI has also worked with the OECD to increase the exchange of experience between developing and developed countries.

Cross-Cutting Collaboration

Crucial to the success of the World Bank Group’s disaster risk management agenda, DRFI builds on long-standing collaboration among the Finance & Markets Global PracticeSocial, Urban, Rural, & Resilience Global Practice, and GFDRR. It also closely collaborates with the World Bank’s Treasury for the structuring and execution of sovereign market-based transactions, and with the Agriculture Global Practice on agricultural insurance.

As experience demonstrates disaster risk finance is best advanced when integrated into broader strategies, DRFI also draws on World Bank Group expertise in other areas such as climate and disaster risk management, energy and water, infrastructure and urban development, agriculture and food security, macro and fiscal stability, public debt and risk management, financial sector development, and scalable social protection. 

Disaster Risk Finance brings together the Analytical & Advisory, Financial, and Convening services of the World Bank Group.

  DRF Products                                                 Project Description                                                  Example            


Catastrophe risk modeling for financial solutions

Collect and manage risk and loss data; analyze historical loss data with actuarial tools; develop catastrophe risk models to assess potential extreme losses.

The Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI) includes a database of over 3.5 million geo-referenced buildings and infrastructure in 15 Pacific island countries. It was used to develop the PCRAFI insurance program.

Financial protection: diagnosis, strategy and action plan

Define policy priorities; clarity and assess the state’s contingent liabilities to disasters and potential post-disaster funding gaps; identify short-term actions for implementation.

In 2014, the National Treasury of the Philippines finalized a national financial protection strategy and the Government of Panama adopted a National Strategic Framework for the Financial Management of Disaster Risk through presidential decree in 2014.

Analytical tools for financial decision-making

Actuarial analysis to support informed decisions on disaster risk insurance; tools for cost-benefit analysis of DRF strategies; tools for evaluating and structuring risk transfer mechanisms.

Working with the government of Mexico to more efficiently combine risk transfer and retention instruments; helping the government of Indonesia select coverage for each region

Public financial management of natural disasters

Establish transparent, timely, and effective post-disaster budget execution and acquittal mechanisms.

Development of­ a manual on post disaster budget execution ­or the Government of­ Tonga and other Pacif­ic Island Countries

Catastrophe risk insurance supervision

Improvements to legal and regulatory f­rameworks to ­foster private catastrophe risk insurance solutions.

Strengthening reporting requirements and reserving in Peru, Vietnam and the Philippines.


Reserves/Contingency Funds

National disaster funds Budget reserves and contingent budget lines

Operations manual for State Reserve Fund in Lao PDR.

Contingent Grants/Loans

World Bank Development Policy Loan with Catastrophe Deferred Draw Down Option (Cat DDO) IDA contingent components and Crisis Response Window Contingent investment projects

World Bank Development Policy Loan with Catastrophe Deferred Draw Down Option (Cat DDO) IDA contingent components and Crisis Response Window Contingent investment projects

Insurance and Capital Market Solutions

Catastrophe Bonds and Capital-At-Risk Notes Intermediation for catastrophe swaps and weather derivatives

US$450 million weather derivative against risk of drought and high oil prices in Uruguay.

(Sub) national catastrophe insurance pools

Advisory and intermediation services to establish regional sovereign or sub–sovereign insurance pools

WBG supported sovereign disaster risk insurance pools in the Caribbean and Pacific include 21 countries and

National property catastrophe insurance pools

Establish sustainable property catastrophe risk insurance programs based on public private partnerships.

The South East Europe and Caucasus Catastrophe Risk Insurance Facility builds market infrastructure for insurance.

Insurance of public assets

Increase/improve insurance of public assets through advisory services, good practice templates

In Colombia, the government uses standardized terms and conditions to insure PPP worth US$38 billion based on international best practice

Agricultural insurance

Establish sustainable agricultural insurance programs and agricultural insurance pools through PPPs.

India’s weather-based crop insurance covered 11.6 million farmers in 2014. In Africa, 270,000 farmers were covered under a weather-based crop insurance in 2014.

Financing of scalable social protection

Integrate scalable contingent component in social protection programs and secure funding

Kenya’s Hunger Safety Net Program reached an additional 1 million people in a 2015 drought.


Convening power

Facilitate cooperation among countries, private sector and development partners

Convening of Caribbean and Central American states to enable the expansion of the Caribbean Catastrophe Risk Insurance Facility

High-level Policy Dialogue

Inform international policy dialogues on DRF with country experiences. Platform for policy dialogue and establishment of good practices.

G20 Initiative on Disaster Risk Management / Disaster Risk Financing and Insurance in 2012, including joint publication between the Government of Mexico and the World Bank. Inputs to G7 Initiative on Climate Risk Insurance Contribution on DRF to regional organizations such as APEC and ASEAN


Share country experiences, lessons learned, and research. Materials for capacity building and development of good practice standards in DRF. Support for the development of high level policy on strategy Disaster Risk and Insurance

2014 publication “Financial Protection Against Natural Disasters” bringing together World Bank expertise in an operational framework to guide countries in developing and implementing comprehensive financial protection policies. Colombia: Policy Strategy for Public Financial management of natural Disaster Risk Panama: Strategic Framework for the Financial Management of Disaster Risk


The Disaster Risk Finance (DRF) Impact Analytics Project is designed to generate more robust evidence and methodologies that can better-guide investment in Disaster Risk Finance programs, to maximize humanitarian and development impacts.  It brings together the practice of catastrophe risk modeling, insurance, and disaster risk management with academic disciplines ranging from actuarial science and financial economics to development economics, public finance and behavioral economics. It began by identifying gaps in the analytical evidence base for Disaster Risk Finance. It then invested in conceptual and empirical research to address the gaps.  It is expected to close by September 2016.

The project has been guided by a small steering committee of experts chaired by Stefan Dercon, Professor of Economic Policy at Blavatnik School of Government, University of Oxford. It is comprised of:

  • Charlotte Benson, Senior Disaster Risk Management Specialist, Asian Development Bank
  • Richard Choularton, Chief of Climate and Disaster Risk Reduction, World Food Programme 
  • Francis Ghesquière, Head of the Secretariat for the Global Facility for Disaster Reduction & Recovery 
  • Robert Muir-Wood, Chief Research Officer, Risk Management Solutions 
  • Reto Schnarwiler, Managing Director, Global Partnerships, Swiss Re

The funding comes from the U.K. Department for International Development Humanitarian Innovation and Evidence Programme

Analytical Work

Media Contacts

Finance & Markets Global Practice, World Bank Group



Olivier Mahul

Program Manager, Disaster Risk Financing and Insurance Program, World Bank and GFDRR

Julie Dana

Lead Financial Officer
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