What are we funding?
GRANT AMOUNT | ENDORSEMENT DATE | ACTIVITIES | INSTRUMENTS SUPPORTED | WB PROJECT |
US$3 million | October 2023 | Covering the premium needed to renew Lao PDR’s flood insurance policy from the Southeast Asia Disaster Risk Insurance Facility (SEADRIF). | Macro/sovereign-level parametric insurance product (renewal) | Lao PDR: Improved Access to Disaster Risk Financing (P505224) |
- Droughts, floods, and storms are Lao PDR’s most prevalent hazards. Three of the five costliest natural disasters have taken place since 2009, including two floods in 2013. Lao PDR’s flood insurance policy was the SEADRIF Insurance Company’s first product and was reinsured through international reinsurance markets. SEADRIF was established in December 2018 as a regional platform to strengthen ASEAN countries’ financial resilience to climate shocks and disasters through risk transfer products and technical support. The SEADRIF Insurance Company provides downstream insurance services to member countries. Lao PDR’s insurance policy comprised two parts: The first was a parametric insurance product that triggered based on the number of people affected by floods of more than 25 cm in depth. The second was a finite insurance component that provided financing for costs resulting from events that did not trigger the parametric component.
- A US$3 million grant from GSFF1 supports the premium for the renewal of Lao PDR’s parametric insurance policy under the Southeast Asia Disaster Risk Insurance Facility. Two earlier policies placed prior to GSFF’s support paid out a total of US$4.5 million for floods in August 2023 and following Cyclone Yagi in September 2024.
- In May 2025, supported by GSFF and US$600,000 from the Risk Finance Umbrella Multi-Donor Trust Fund, the government renewed the policy for an additional two years. The renewed multiperil policy provides up to US$16 million in financial protection against floods, tropical cyclones, earthquakes, landslides, and related perils.
- Notably, the renewed policy introduces an innovative impact-based trigger linked to the annual aggregate number of people affected by disasters. Lao PDR is among the first countries to pilot this approach, which could serve as a model for other SEADRIF member countries.