India’s government to discuss disaster management and catastrophe bonds

India’s Prime Minister, government officials and the National Disaster Management Authority (NDMA) are meeting today to discuss current issues regarding disaster preparedness and risk transfer which could affect India’s population and economy.

The meeting has been arranged to look at issues such as radiation sensors for nuclear and radiological emergencies, an issue India has begun to focus on since the nuclear emergency in Japan, and creation of a disaster response force capable of responding to both natural and man-made disasters.

Much of what is on the agenda has been prompted by the earthquake, tsunami and nuclear disasters in Japan in March. India has an active nuclear power program (it’s the fourth largest source of electricity for the country) and as such has taken the events in Japan seriously and realised that it is unprepared for such a disaster.

Earthquake risk is also high on the agenda and the NDMA will be discussing issues relating to the National Earthquake Risk Mitigation Project that India has been proposing and working on. One step that is being proposed is to link financing for construction to the building codes that must be adhered to, so buildings that don’t adhere won’t be able to get bank loans to help with construction.

Also to be discussed is the issue of disaster risk transfer and re/insurance coverage. Proposals which will be discussed include the use of catastrophe bonds to mitigate natural disaster risks (India is exposed to windstorm, flood, earthquake and other perils), reinsurance to pay victims of disasters to help reconstruction and catastrophe risk pools such as the one General Insurance Corporation has been in talks regarding. The proposal is to increase the levels of re/insurance cover available both to the population, businesses and to the government.