Indonesia: Regional government seeks disaster insurance coverage
Source: Asia Insurance Review | Aug 2023
The Financial and Asset Management Agency head for the special region of Yogyakarta Wiyos Santosa said that the regional government is ready to adopt disaster insurance plans if there are insurers ready to offer such coverage.
According to local media reports, Mr Wiyos said, “We have insured government buildings but not for disasters because catastrophe insurance is unavailable. Premiums may rise, but what’s important is that if there is a disaster, it can be covered.”
At present, buildings owned by the regional government are insured against fire and riot risks.
Losses from disasters
Indonesia suffered economic losses of $1.54bn on average every year from 2000 to 2016 due to natural disasters, said the Ministry of Finance.
“The series of natural disasters that occurred with large economic losses prompted the Indonesian government to issue a Disaster Risk Financing and Insurance Strategy (PARB) or Disaster Risk Financing and Insurance (DRFI) at the end of 2018,” said Finance Ministry expert on macroeconomics and international finance Mr Parjiono who opened a seminar on 10 July in Yogyakarta.
The seminar, titled Disaster Risk Financing and Insurance and Adaptive Social Protection Implementation in Indonesia, is part of the ASEAN Ministers of Finance and Governors of Central Banks meeting.
Through the PARB or DRFI strategy, the funding capacity for disaster management can be increased by seeking new alternative sources of financing outside the state budget. In addition, some disaster risks can also be transferred through insurance. This aims to increase the ability to finance disaster management and build economic resilience in Indonesia, said Mr Parjiono.
In addition to developing a PARB strategy, the government also launched the Disaster Pooling Fund. A