6 min readOct 17, 2024 10:15 AM IST
First published on: Oct 17, 2024 at 08:02 AM IST
For all our efforts within the disaster management community, it’s often extremely challenging to get people to realise that disasters happening around them could one day affect them directly. The common citizen tends to believe that disasters and other disruptions are meant for others.
Very few realise that a devastating earthquake could render a well-to-do middle-class person and his family homeless, even relegated to a government relief camp. Elevate this personal security issue to the national level and imagine the effect of natural and other disasters in different parts of the country around the year, hugely denting the national aspirations of making India a $5-trillion, and then a $10-trillion economy.
Such an economy could improve the status of many people, and make the poverty-stricken upwardly mobile. Yet, that can only happen if there are no downturns. Disasters are major causes of economic downturns. Those who perceive national security as something related just to borders being secure have to remember that without the ability to secure our aspirations there can never be any national security.
Where does disaster risk insurance come into all this? The connection starts with Prime Minister Narendra Modi’s speech at the Asian Ministerial Conference on Disaster Risk Reduction (DRR) held in New Delhi in 2016. In that speech, PM Modi outlined the Ten-Point Agenda for DRR, a mantra now linked positively and inextricably to the Indian Prime Minister’s name. The second point of the Agenda states: “Risk coverage must include all, starting from small households to SMEs, to multinational companies”.
Risk coverage has two connotations. First, physical safety from disasters through early warning systems, mitigation, and effective responses when everything else fails. The second is the necessity of the hope of receiving optimum compensation for losses. It is difficult for the state to compensate individuals in full to rebuild lives and livelihoods, and simultaneously recoup losses in terms of infrastructure and other aspects of recovery. That is where different forms of risk insurance come in. Many countries around the world insure people, their properties and infrastructure so that adherence to the principle of “build back better” can be promised more realistically. Insurance companies have analysed disaster risk in a professional way at the international level and found that there are doable business models.
We should be extremely happy that disaster-related insurance is at last receiving due attention in India too because disasters will never stop occurring and there is enough scope for reasonable business opportunities for insurance companies and fair deals for both government and private players to receive the benefits of insurance coverage.
The National Disaster Management Authority (NDMA) of India recently conducted a daylong workshop on this theme along with the heads of several important insurance companies and intellectuals from the financial world. It provided several takeaways that can be developed into insurance instruments in ways that satisfy the objectives of insurance companies, government and private individuals.
These will, of course, need to be researched and modelled. Parametric insurance is the sought-after financial domain by disaster managers with no apparent objection from the insurance world. It ensures that on the occurrence of certain mutually accepted parameters related to identified hazards, insurance will be available to the insured without verification of individual claims. This cuts down time-consuming and often annoying bureaucratic scrutiny and approval spirals.
Disaster risk insurance can enhance key aspects of human security. It’s important to realise that human security holds the key to national security, especially in regions where proxy wars, based upon terrorism, abound. Bangladesh lost 1,40,000 people and innumerable of the country’s citizens were injured and displaced due to the fury of the super cyclone in 1991. Human security in the underdeveloped environment of the nation has been a nagging factor ever since then. Displaced and homeless people have always been targeted by radical ideologies around the world. Their vulnerability is exploited to the hilt. Such vulnerabilities invariably lead to illegal migrations and restiveness in the receiving societies.
The spiral never ends. Remember Haiti and the earthquake of 2011, which measured 9 on the Richter scale. 3,16,000 people died and many Haitians were forced to migrate due to the inability of the country’s government to assist them in rebuilding their lives. There was no question of insurance there. The wave of migration from that event haunts the US even today and is a major issue in the current presidential contest. Africa’s frequent tryst with drought has had an immense impact on nations such as Somalia, Sudan and Western Sahara. It has been one of the reasons for societal turbulence that has afflicted a large number of countries in Africa and pushed them into severe debt traps.
Perhaps the greatest potential for disaster-related security issues exists right across India’s border, in Pakistan. A precedent needs recall. In 1981, three million refugees came out of Afghanistan as a consequence of the Soviet invasion. They were housed in tented camps in Pakistan along the Pakistan-Afghanistan border and fed by UNHCR.
However, the presence of hundreds of radical preachers ensured the birth of the young Taliban who 15 years later captured power in Kabul and changed the dynamics of the international order. That was not a natural disaster-related event. But just like the vulnerabilities of the Afghan refugees were exploited in the 1980s and 1990s, the insecurities of an estimated 2.6 million displaced people from Pakistan’s flood-ravaged areas of 2022-23 can also be exploited by elements in Pakistan’s badlands.
The nation has no scope to offer compensation or promise to “build back better”, now or any time in the future. It’s worth recalling that India’s problems with radical terror commenced with the rise of elements who were nurtured in the IDP camps on Pakistan’s western border.
As the world warms and cools, it needs to look at human security much more pragmatically and be more focused on bringing disaster risk insurance to the fore, everywhere.
The writer, a former corps commander of the Srinagar-based 15 Corps, is member of the National Disaster Management Authority. Views are personal
Disaster risk insurance can enhance key aspects of human security. 
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