Retention and Transfer


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

Addressing the risk retention and transfer requires the following component and subcomponent

Brief Description

Pre-disaster financial programmes for residual risk can meet several needs. They can provide quick liquidity to governments for relief and resilient recovery of damaged government properties and infrastructure, and offer insurance to farm-land owners, agricultural businesses and agricultural actors to mitigate the financial impact of the weather-related event. It implies a constant need to develop and support capacities for effective preparedness, response and recovery, through applying a risk retention and transfer instrument as part of a holistic approach.

The two components aim at answering the following key questions

  • How can governments, agricultural businesses and producers identify means for meeting the costs of weather-related events while minimizing the threats to well-being, fiscal stability or development?
  • What disaster risk financing mechanisms are available to mitigate the adverse impact of extreme weather events?
  • How can DRF instruments best complement insurance solutions in mitigating adverse impacts on the agricultural sector and its value chain?
  • What is the level of insurance interest existing among the governments, agricultural businesses, smallholders and individual farmers to use insurance as a risk financing mechanism?