What it's about:
New types of insurance could cut the costs of natural disasters for poorer countries and reduce the amount of humanitarian aid needed, according to a report commissioned by Britain's international development ministry.
For example, some use "parametric" structures, where insurance payments are triggered by a predetermined factor, such as an increase in water height at a specified location.
Such models are used in existing insurance facilities such as African Risk Capacity and make payments more effective.
At the recent G20 meeting, Britain said it would set up the London Centre for Global Disaster Protection to help developing countries use insurance to cut disaster costs.
Why it's noteworthy:
The cost of natural disasters to some of the world's poorest countries has averaged about $29 billion a year in the past 15 years, says catastrophe modelling firm RMS.
Insurance has only paid for 3 percent of the average costs of earthquakes, drought or floods in 77 low and low-middle income countries - or $900 million - but could cover up to $6.8 billion if more insurance structures were used, according to the report RMS prepared for Britain's Department for International Development.
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