Kathmandu. The United Nations has launched a new insurance scheme of up to $40 million to address the financial crisis caused by major disasters. Its purpose is to mobilize funds to help those who need it before disasters such as floods or cyclones strike.
The insurance plan was announced by the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) on November 2. Partners include the United Nations Children’s Fund (UNICEF) and the World Food Programme (WFP). The insurance agreement was arranged by Gallagher Re and Liberty Mutual is the lead insurance company. Technical advice was provided by the Disaster Protection Center.
Under this new system, if a disaster is anticipated, the United Nations will allocate funds for advance relief. If the total allocation from the United Nations Emergency Response Fund (CERF) exceeds $61.5 million during the insurance period, additional funds will be made available through insurance. A maximum of $40 million can be contributed to this fund. However, if the limit is exceeded, the full amount is not guaranteed. The amount received will depend on the terms of the insurance.
The money received from this insurance will not go directly to the government or the general public of any country. If the conditions are met, this money will go to the United Nations Emergency Relief Fund. From there, various UN agencies will arrange for advance assistance to people in disaster risk areas. However, not all countries or all people will automatically receive this benefit. Who will receive the assistance depends on the disaster risk and related relief activities.
OCHA’s Early Disaster Response Program has a budget of $15 million. That reaches more than 5 million people. The new insurance plan could help even more people. However, it is not yet clear how many will benefit. UNICEF has also rolled out a separate insurance cover of $5 million for its 10 joint early response programs.
“Disasters don’t wait for us to prepare. So we have to be fully prepared before disasters,” said Tom Fletcher, the UN’s emergency and relief coordinator.
The United Nations has not disclosed the premium, duration or time frame for this new insurance plan. -Agency
