Insurers Mull over Risk Sharing for Disaster-Prone Viet Nam

Mar 24, 2004

Ha Noi - The Ministry of Finance (MOF) and the UN Development Programme (UNDP) organized today a seminar on “Natural disaster loss – Using financial tools to reduce the disaster impacts on people’s livelihood in Viet Nam”.

The two-day meeting brought together Government and provincial officials, representatives from research institutes and many domestic insurance companies to discuss the role of the insurance sector in disaster reduction in Viet Nam. The seminar also benefited from international and regional lessons from a foreign reinsurance company, the Swiss Reinsurance Company, as well as Donors and NGOs. 

Participants discussed the feasibility study to establish the Disaster Mitigation Self Reliant Fund. The study – led by the Institute of Financial Science under the MOF and partially funded by the Swiss Reinsurance Company under its “Solution Sharing Programme” - was conducted under the UNDP supported project “Capacity building for disaster mitigation in Viet Nam”.

“This seminar is a good example of how public and private sector can work more effectively together to address such an important development issue as insuring against disasters in such a disaster-prone country like Viet Nam,” said Ms. Kanni Wignaraja, UNDP Deputy Resident Representative.

Natural disasters - particularly typhoons and floods, but also tropical storms, droughts, landslides, forest fires, and occasional earthquakes - pose a significant obstacle to sustainable development, poverty reduction and environmental preservation in Viet Nam.  “These natural shocks can erase decades of hard-won development and further entrench poverty and inequality”, said Ms. Kanni Wignaraja, UNDP Deputy Resident Representative. “It is therefore essential to have a more comprehensive and sustainable approach to insuring the poor, that goes beyond the safety net approach and encompasses the resources of both private and public sectors,” she said.

According to UNDP, Viet Nam is one of the most disaster-prone countries with 70% of the population exposed to disasters, especially water-related disasters. An average of more than 1 million people need emergency relief each year due to natural calamities. Many of these people are just above the poverty line, and the impact of a flood or typhoon often pushes them back into poverty. Moreover, analysis of trends over time suggests that the frequency and severity of natural catastrophes are on the rise as a result of environmental degradation.

Contact informationUNDP Communications Unit 9421495 (EXT: 159); Fax: (04) 942 2267;
Ms. Pham Thanh Hang, UNDP Programme Officer, Tel. 9421495 (ext. 151);

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