The government of Indonesia has launched a new disaster risk pooling facility that will initially have more than US $500 million of capacity available to help pay for the economic costs of natural catastrophes and severe weather events, but with a future goal of transferring some or all of the risk to private insurance or capital market sources.
Indonesia’s move to create a disaster risk pool comes after a number of year’s of work with the World Bank and other organisations to better understand its exposure to disaster risks and the costs it suffers from them.
It’s estimated that Indonesia suffers somewhere between US $1.3 billion and US $1.5 billion of economic damages from natural disasters on average each year.
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