Pre-event financial protection is key to flood recovery

This policy brief highlights financial capital as a key factor in building flood resilience. In particular, access to pre-event financial protection against flood-related disasters is a vital component. Solutions range from insurance and micro-insurance to pre-arranged post-disaster lines of credit and dedicated government relief programs. Implementation of these solutions should allow for further community resilience investment.

Key recommendations

• Communities require adequate financial capital not only to limit financial exposure to disasters, but also to support human, social, physical and natural capital. 
• A community’s financial exposure, both direct (impact on assets and livelihoods) and indirect (interruption of economic activities), must be understood and measured. 
• Pre-event financial protection options include insurance or micro-insurance, and alternative risk transfer instruments as well as streamlined access to pre-arranged post-disaster lines of credit and dedicated government relief programs. 
• Public and private sectors must work together with civil society to co-generate these options into solutions that are widely available, affordable and adopted on a local and national scale

Also available in Spanish: Protección financiera antes del evento: factor clave para la recuperación después de una inundación