India: InsuResilience Solutions Fund Insurance against natural disasters for the Indian state of Nagaland
Furthermore, Nagaland is located in a zone highly prone to earthquakes – twelve major earthquakes occurred in the region over the past 100 years. 70 per cent of the population is poor and vulnerable and is thus affected disproportionately by these extreme events.
India’s states have access to the State Disaster Response Fund (SDRF), supplemented by resources from the National Disaster Response Fund (NDRF). However, in the event of a major disaster the two state funds would not be able to provide resources with the volume and rapidity that would be needed to finance emergency aid, make compensation payments to victims and reconstruct critical infrastructure.
To improve the protection of the state of Nagaland against natural disasters and test a first insurance scheme for the 2020 monsoon season, the responsible authority launched a partnership with insurance company Tata AIG and reinsurer Swiss Re.
The common goal of the three partners is to develop insurance against extreme rainfall and earthquakes and thus boost Nagaland’s resilience to natural disasters. The scheme increases the financial capacity of the existing state and national disaster response funds, putting them in a position to provide compensation at a sufficient level and sufficiently quickly in the event of disaster.
The InsuResilience Solutions Fund (External link) (ISF) is supporting the development of the new insurance product against natural hazards by meeting 50 per cent of product development costs and assisting the project partners during the product’s launch.