Adverse impacts of natural hazard shocks and rapid degradation of natural resources threaten Vietnam’s gross domestic product (GDP) and related social development gains. Drought and saltwater intrusion has had far-reaching socioeconomic effects, including food insecurity, water scarcity, associated health issues, and loss of livestock. It developed into a national crisis, with close to 2 million people affected due to damaged livelihoods and the country seeking international help. The Vietnamese Government reached out for help to develop innovative financing models and products to improve the resilience of vulnerable coastal communities in Vietnam to climate change.
Our specialized risk management expert focused on how to identify, assign, manage and mitigate the impacts of natural disasters (including those brought on by climate change) on the government and coastal communities of Viet Nam, including the use of insurance across the financial and productive sectors to mitigate risks. Our expert reviewed two approaches - ex-post (wait and see) and ex ante (investment in disaster risk management). Risks were assessed by components (hazard, exposure, vulnerability, impact, and risk) and insurance options developed. Risk coverage, level of coverage, risk appetite and post disaster budget developed. A layered level of risk was determined, and appropriate strategies developed, including parametric insurance, microinsurance, agriculture insurance and property disaster insurance.
Transformation
Our climate and disaster risk finance team developed a disaster risk strategy, including putting in place necessary insurance laws and regulations, options for practical insurance products, and the option of self-insurance by Government.