SDN Week 2012
February 24
Jolanta Kryspin-Watson
Developing Risk Market Infrastructure for Access to Catastrophe a
Weather Risk Insurance: Experience of SEEC CRIF
Main Features of the Southeast Europe and
the Caucasus Catastrophe Risk Insurance Facility
Jolanta Kryspin-Watson
Disaster Risk in ECA – Regional Context

Highly vulnerable to natural hazards, such as: earthquakes,
floods, landslides, droughts, wild fires, etc.

Frequency and severity of disasters of hydro-meteorological
origin seems to be growing

90% of Southeastern Europe in trans-boundary river basins

Balkans and Caucasus located on two continental plates and
are vulnerable to earthquakes

Governments have limited capacity to assist their populations
in regaining assets and productive capacity destroyed by
disasters

Catastrophe insurance and weather risk coverage almost
non-existent
Vulnerabilities affect people’s life and welfare:
In urban areas, poorly constructed buildings are
highly vulnerable to earthquakes (e.g., 1988 Spitak
earthquake in Armenia killed more than 25,000
people; 1999 Marmara quake in Turkey left about
17,000 dead; or Oct 2011 in Van, Turkey, left about
700 dead). Potential heavy damage to private and
public buildings (in Istanbul estimated at 350,000
buildings).
In rural areas, insufficient flood
protection infrastructure, lack of
forecasting, monitoring, early warming
system, and mitigation cause systematic
and dissipative floods affecting people
and their assets (e.g. floods in Moldova
2010, or Albania 2009 and 2010)
Development of SEEC CRIF as a result of a regional approach to the
DRM – Analytical Work
1. South Eastern Europe Disaster Risk Mitigation and Adaptation
Program
2. Central Asia and Caucasus Disaster Risk Management Initiative
3. Mitigating the Adverse Financial Effects of Natural Hazards on
Economies of South Eastern Europe
4. Mitigating the Adverse Financial Effects of Natural Hazards on the
Economies of Central Asia
5. Disaster Risk Management and Climate Change Adaptation in ECA;
6. Climate Adaptation in Europe and Central Asia
7. Strengthening the Hydrometeorological Services in South Eastern
Europe
8. Improving Weather, Climate and Hydrological Services Delivery in
Central Asia
SEEC CRIF Objective

Increase the access to catastrophe and weather risk
insurance coverage of:
 homeowners,
 SMEs
 farmers
 utilities
 government agencies
which are exposed to weather risk and geo-hazards
in member states in order to:
reduce economic vulnerability and financial risk
due to natural disasters.
What perils does it cover?
Weather related perils (examples)

Flood

Drought

Freeze

Hail
Geo-hazards

Earthquake and

Fire following earthquake
Parametric and indemnity insurance products
Program Execution
Europa Re (Europe Reinsurance Facility Ltd.)

Multi-lateral government-owned organization

Specialized regional reinsurance organization

Incorporated under Swiss law in Zug, Switzerland

Mandated to provide on a non-profit basis:
 Reinsurance
 Pricing
 Underwriting
 Claims settlement services to private insurance companies in
member states
Governance Structure
Member Government role:
 Financial contribution (share) to CRIF
 Strategic oversights
 Owners for first 5 years of Europa Re
 Raise awareness and demand
 Shape regulatory framework in member countries
 Participation in Annual Meetings of Shareholders and Advisory
Policy Board
Main features of Europa Re
Why would governments need such a reinsurance company?
To enable them develop domestic catastrophe and weather risk
markets through:
 unique access to highly innovative and cost-effective
insurance underwriting, pricing, claim settlement and
production technologies,
 assistance in designing advanced risk-based insurance
supervision, and
 access to dedicated reinsurance capacity for weather risk (if
needed).
Establishment and capitalization of Europa Re

Established in November 2009 under Swiss Law

Employs independent Board of Directors

Received USD1.78 mm equity contribution from Albania –
part of a comprehensive disaster risk management project

On March 3, 2011, the World Bank approved loans –USD5 mm
each – to FYROM and Serbia.

In case of Serbia, the loan has been approved and disbursed.

In case of Macedonia, the loan was approved by the parliament
and is scheduled for disbursement in 2012

Two new countries expressed their interest and loan preparation
is ongoing: Bosnia and Herzegovina; and Montenegro
Raising donor funds

Raised USD4.5 mm from SECO for technical work

Global Environmental Facility (GEF) approved $5 mm for
 Regulatory assistance
 Weather risk models
 Weather stations
 Risk maps
 Weather insurance products
 Public awareness

EU – USD0.25 mm for technical work – available through
UNISDR

UNISDR – USD0.1 mm for technical preparation work

GFDRR – preparatory work (USD0.5 mm)
Predecessors of SEEC CRIF supported by the Bank

Turkish Catastrophe Insurance Pool (TCIP)

Romanian Catastrophe Insurance Pool (RCIP)

Caribbean Catastrophe Insurance Facility
How SEEC CRIF is different?

combination of traditional indemnity type cat products and
parametric index-based weather risk hedging

private management and governance

sunset clause for government participation

openness to a wider range of clients
Thank you
for your attention!