The World Bank will work with the governments of Japan and Singapore to establish an insurance scheme against natural disasters in ASEAN countries, including Myanmar.
According to a report by Nikkei, the scheme could be operational by spring 2020, and Myanmar and Laos will be the first buyers of the insurance. The two countries will pay a combined premium of $20m to insure bridges, piers and other public infrastructure from damage caused by natural disasters.
Singapore-based Southeast Asia Disaster Risk Insurance Facility (SEADRIF) will handle the framework’s administrative aspects, while the Japanese and Singaporean governments will provide support.
The World Bank plans to help calculate payouts, using satellite and other digital tools to evaluate damage. It will also act as a failsafe, in case local communication networks go down due to disaster.
The framework targets low-income countries with few options for insurance from the private sector. It may eventually be extended to middle-income countries in the region and Vietnam, the Philippines, and Indonesia, have expressed interest.
The insurance will also help businesses, as many have factories and other facilities that could be affected by natural disasters, especially if public infrastructure suffers critical damage.
SEADRIF is the region’s first disaster risk financing facility, which aims to provide climate and disaster risk management and insurance solutions to ASEAN member states.
Myanmar signed a Memorandum of Understanding for the facility with Cambodia, Indonesia, Japan, Lao PDR, and Singapore in December 2018.