Swiss Re has been confirmed as the reinsurance partner to a new public-private disaster risk insurance scheme in the Indian state of Nagaland, which aims to increase the region’s climate resilience.
The scheme is co-funded by InsuResilience Solutions Fund (ISF), an initiative managed by Frankfurt School of Finance and Management and funded by the German KfW Development Bank.
The project will be implemented by a partnership consisting of the Nagaland State Disaster Management Authority (NSDMA), the local insurance company Tata AIG General Insurance Company Limited, with Swiss Re as reinsurance partner and the Swiss consultancy firm Faber Consulting as project coordinator.
The Indian state of Nagaland – located to the east of Assam and west of Myanmar – is exposed to high levels of humidity and heavy rains in the monsoon months of May to September.
During the Monsoon season 2017, heavy storms, flash floods, heavy rain and landslides claimed 22 lives, and caused severe damage to public and private properties, affecting 30% of Nagaland’s population.
Additionally Nagaland lies in a very high seismic zone, twelve major earthquakes have occurred in the region in the last 100 years, and 70% of the population is considered as poor and vulnerable and therefore are over-proportionately exposed to these extreme events.
State Disaster Response Mitigation Funds (SDRMF) are the primary fund available for disaster response measures of Indian States, with complementary funding provided by the National Disaster Response Fund (NDRF).
However, Nagaland´s State Government considered both options to be underfunded, and says it is currently lacking the necessary resources for relief measures and the minimum compensation to victims of these disasters.
In response, this partnership with Tata AIG and Swiss Re will look to increase the state’s protection against natural catastrophes and to pilot a first insurance protection for the monsoon season in 2020.
To expand and enhance the existing excess rainfall cover and develop a complementary earthquake cover, the InsuResilience Solutions Fund is now co-funding the innovative insurance programme in order to strengthen Nagaland’s resilience to natural disasters.
“With the start of the project we will enhance the existing State and National Disaster Risk Funds by developing and implementing a parametric insurance solution for the monsoon season and earthquakes,” said Johnny Ruangmei, Officer on Special Duty at NSDMA, Government of Nagaland.
“This allows us to provide more meaningful and faster compensation in case of a disaster. Investment in risk transfer is essential to foster Nagaland’s resilience and sustainable development.”