Sovereign Catastrophe Risk Pools: A Brief for Policy makers

More than 1 billion people have lifted themselves out of poverty in the past 15 years, but climate and disaster risks threaten these achievements. Global asset losses’ from disasters are now reaching an average of more than US$300 billion a year.

A decade of experience has shown that political commitment, sound operational design, and financial sustainability are at the foundation of successful risk pools. When those foundations are in place, risk pools can in turn generate positive externalities that further enhance their impact, by fostering political, operational, and financial effectiveness. To build on this experience and bring catastrophe risk pools to scale, policy makers should keep in mind the following 10 lessons.