Disaster Risk Finance: what is it? Why is it so important? And how do I get some?!
Disaster Risk Finance (DRF) instruments are financial tools that facilitate the various costs of disaster risk management.
From Impact Bonds to Contingent Loans, DRF comes in many flavors. It can be challenging to compare the relative costs and benefits of the various options. Integrating them into a coherent and cost-efficient risk management strategy harder still.
This DRF toolkit, commissioned by GIZ under the “Advancing Climate Risk Insurance Plus” (ACRI+) program, provides practical guidance on DRF for those responsible for disaster risk management. It is applicable for those working on disaster risk at national, regional, and local levels. It is targeted as much at policymakers in donor nations as it is the development and humanitarian communities who work to reduce the overwhelming impacts of disasters on the most vulnerable.
The toolkit builds on the fundamentals of quantifying and managing disaster risk. It then introduces instrument design considerations before providing a taxonomy of DRF instruments.
In so doing, the toolkit provides practical guidance on selecting DRF instruments, and ultimately demonstrates how to integrate multiple instruments into an effective risk layering strategy.
