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FEATURE STORYNovember 22, 2023

An Irish Farm Girl Takes on “Disaster Risk”


Charlie Lapetina, former high school intern at World Bank  interviews Naomi Cooney, Senior Financial Officer Disaster Risk Management Expert, World Bank Treasury

“Join now.” The blue button on the Teams screen was asking me to start the meeting. I was about to interview Naomi Cooney, a Senior Financial Officer in Treasury, for the International Day for Natural Disaster Reduction.

I had done a lot of preparation for the meeting, researching Naomi’s extensive career in finance, including in disaster risk insurance. I took online courses on catastrophe bonds, to be familiar with the topic. I prepared a list of questions and vetted them with my mentor. After a last check of my camera and sound settings and a deep inhale-exhale, I clicked.  

Naomi's brother Karl Cooney, at the family farm in Ireland: ‘The fields are too wet to harvest’: Farmers fear loss of crops due to record rainfall- Aug 7 2023' Photograph: Alan Betson, Irish Times
 Charlie: Do you have any personal experience with disaster risk management?  

Naomi: I grew up on an Irish farm. My family’s income and our livelihood largely depended on each year’s harvest. There were good years and there were bad years depending on the weather. In many countries, a disaster event like an earthquake or hurricane can have catastrophic effects. In Ireland, excessive rain causes havoc for farmers who can lose an entire year’s harvest. Just this year my brother faced the prospect of having to plough crops back into the ground since the fields were too wet for machinery to go in to harvest.

I was introduced to the world of risk management long before I even knew its name. My dad with only an elementary school education understood the benefits of managing risk. He would tell me about buying options to mitigate the price of wheat, about diversifying into dairying to better manage the family income stream, and about buying life insurance in case of a farm accident. His influence and work ethic, along with my mom’s guidance, were a huge part of how my career in finance and risk management began!

Charlie: Why does the World Bank help countries finance disaster risk? Shouldn’t we be helping them finance development projects instead?

Naomi: The answer is quite straightforward. Disasters carry huge costs for countries.

When a disaster strikes, often governments are forced to divert resources away from development projects to help finance relief and recovery efforts. With climate change bringing stronger and more frequent events, the need for financial protection against disasters is even greater.

Disasters can have a huge impact on a country’s GDP and slow down or even reverse development efforts. Pre-arranged financing for disasters allows Governments to respond quicker and more effectively, reducing the overall cost for Governments and the impact on citizens. Supporting Governments with tools like the Bank’s catastrophe bond or contingent credit products can help minimize disruption to a country’s development projects and activities when a disaster occurs.

Part of the World Bank Treasury, Market Solutions & Structured Finance team at the Innovate 4 Climate Conference
Charlie: Who actually pays the bill after a disaster?

Naomi: Most of a disaster’s cost falls on Governments. That means ultimately it is taxpayers who foot the bill. Take for example this year’s earthquakes in Turkey or last year’s floods in Pakistan where the costs for the countries Governments are expected to run into the billions.

Governments can retain and manage costs with pre-arranged financing tools such as contingency funds and contingent credit products like the World Banks CAT DDO and with budget reallocations and tax increases post disaster. They can also transfer some of the disaster costs to reinsurance and capital markets investors who are well equipped to finance such risks. The Bank has a long history of working with Governments to design and implement disaster risk financing strategies that use a range of these risk financing instruments to increase financial resilience against disasters.

In many developing countries, when the costs of a disaster exceed the government’s capabilities, donors in the international community are called on to intervene and support with humanitarian aid and financial assistance. These donors can help reduce the bill by supporting countries with pre-planned risk finance.

Charlie: Could you give us some examples of the projects you have worked on recently?

Naomi: The most recent examples are risk management transactions for Chile and Jamaica, countries of significantly different size but both with huge exposure to disaster events. In March this year, we executed a transaction that provides the Government of Chile with $630 million of earthquake insurance for three years. This $350 million catastrophe bond and $280 million catastrophe swap transaction transfers Chile earthquake risk to close to 30 investors internationally. For Jamaica, we issued a catastrophe bond in 2021 that provides the Government with $185 million of insurance cover for three hurricane seasons. The Jamaica catastrophe bond is a great example of donors supporting a countries risk financing strategy.

In June the Bank announced an expanded toolkit to better support countries with crisis preparedness and response. I’m currently working on one element of this which aims to provide clients with the option to embed insurance and catastrophe bond transactions in Bank financing. This will improve access for clients to such instruments, providing clients with the option to pay for catastrophe risk transfer using Bank financing or by adding a spread to debt repayments. This is incredibly exciting and we’re already seeing increasing interest from old and new clients in catastrophe bond transactions.

A risk management mindset has been beneficial to other projects I’m working on in Treasury. Earlier this year we designed and issued an innovative Outcome Bond that mobilized private capital for a water purification project in Vietnam, providing investors with a return linked to the carbon credits generated by the project, and in doing so transferring project risk to private investors. This followed the first of its kind Wildlife Conservation Bond we issued last year to support a rhino conservation project in South Africa, transferring project risk from donors to investors. 

Cooney Family on a recent trip to the family farm in Ireland
Now it was time for me to switch gears and ask Naomi some personal questions. Did she have a family? Why did she select this career? What was it like to work at the World Bank? Here is what I have found out.

 Naomi has three small kids, and with a supportive husband and in-laws across the street, juggles family and work time. She started her career as an actuary in Ireland, working in the private sector for 10 years before joining the World Banks Disaster Risk Financing and Insurance team in 2014. She’s been in Treasury for close to five years and loves her role where she sits between clients and private markets and undertakes work that has a profound impact. Being a World Banker, she doesn’t think we ever stop learning. She believes that searching for better solutions is a hallmark of any Bank staff. So, she recently started an MBA program adding one more item to her already busy life. All in pursuit of better serving our clients. 


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