Prevention of weather-related events and natural disasters is a central part of DRM, consisting of various measures that avoid the potential adverse impacts of hazardous events. While certain disaster risks cannot be eliminated, prevention aims at reducing vulnerability and exposure in such contexts (United Nations General Assembly, 2016). The ‘prevention’ phase contains the following components: Risk Assessment, Impact Analysis, DRM Performance Analysis, Integration

Brief Description

Prevention is a comprehensive phase at the beginning of the DRM cycle that starts with a risk assessment of weather-related hazards, and the exposure and vulnerability of geographic regions and the population. The impact analysis assesses the implications of extreme weather events on the state, agricultural private sector and individual producers.

For managing weather events and disasters, the practised DRM mechanisms are analysed (including cost-benefit assessments) and protection gaps identified. On the basis of this information, preventive measures can be selected and the demand for insurance identified. However, the inclusion of insurance can provide the government with an increased access to capital through, for example, increased access to credit, or green bond guarantees, to build preventive infrastructure such as dams and desalination or recycling plants to strengthen water resilience during droughts.

The four components aim at answering the following key questions:

  • What have been the historical climate disaster risks for the agricultural sector and its value chain? What are the specific frequencies, intensities and impacts?
  • Are there any production practices which tend to increase disaster risks in the agricultural sector?
  • Are there any gaps in the DRM mechanism, and at what point can insurance solutions be more economical to fill the gap?
  • Which risk reduction and preventive measures can reduce the impact of climate disasters on governments, the agricultural sectors (especially small and medium enterprises) and individual producers?
  • In which way could the insurance industry design insurance products as a risk management instrument to reduce the magnitude of future disaster losses and vice versa − and how could the insurance industry and the insured benefit from loss prevention measures in the ‘prevention’ phase?