Risk Transfer for Populations in Precarious Urban Environments

Abstract

This study explores risk transfer options that precarious and marginal urban communities could use to protect themselves from future damages and losses generated by socio-natural hazards and disasters at the individual and community levels. The design is framed within an evidence-based disaster risk reduction (DRR) strategy and follows the case study research approach. We analyze the 2018 Neighborhood Approach for DRR programming evaluation carried out in four Latin American cities' informal settlements and review relevant risk transfer experiences aimed at vulnerable populations. We calculate the pure risk premium for the four cases selected, using a previous catastrophe risk assessment for earthquakes and landslides. We propose three risk transfer options based on our analysis: (1) voluntary collective insurance; (2) structural reinforcement with a comprehensive housing insurance; and (3) hybrid parametric insurance. Risk transfer mechanisms conventionally focus on residual risk management. Here, due to the precariousness of the analyzed urban settings, the proposed alternatives go beyond the management of just residual risk to positively impact the beneficiaries' quality of life and the reduction of the built environment's physical vulnerability in the short and medium terms. Our study proposes a prospective estimation of future risk despite the limitations of data availability. This study opens a window to new approaches and proposes a systematic process to design DRR policy aimed at the poor and vulnerable strata of society.

Quranic Perspective on Disaster Management: Analysis from Prophet Yusuf A.S History

“…A study conducted by showed the risk of disaster to the city community [10]. Disaster risk reduction can be done by minimizing and protecting the affected person [11]. Disaster planning needs to be done to reduce the amount of damage and losses in the future because of hazards and social and natural disasters at the level of individuals and communities.…”

“…(2) structural strengthening with comprehensive housing insurance; and (3) hybrid parametric insurance [11]. So, the experimentation on how to deal with social disasters and environmental disasters from conventional means by focusing on residual risk management to risk management methods that have a positive impact on the quality of life of beneficiaries and reduction of physical vulnerability of the built environment in the short and medium term.…”

“…So, the experimentation on how to deal with social disasters and environmental disasters from conventional means by focusing on residual risk management to risk management methods that have a positive impact on the quality of life of beneficiaries and reduction of physical vulnerability of the built environment in the short and medium term. Alternative approaches and systematic processes to design Flood Risk Reduction policies aimed at the poor and vulnerable need to be taken even with limited funds [11].…”

“…A study conducted by Sarmiento (2020) showed a comprehensive relationship between land ownership guarantees, access to credit, housing improvements, and the expected outcome of safer housing. This affects communities affected by the disaster and can reduce the risk of disaster [11]. study of eight informal settlements in six Latin America and Caribbean countries in 2017-2018 found residential mode and land tenure situations could predict changes in disaster risk factors such as the physical condition of residence and the social condition of residents [11].…”

Understanding Social and Environmental Hazards in Urban Areas: An Analysis from Barranquilla, Colombia

“…In this context, several authors have discussed the relationship between quality of life and disaster risk in vulnerable scenarios (Sarmiento and Torres-Muñoz 2020;Cui and Han 2018;Aihara et al 2018;Khachadourian et al 2015;Lin et al 2002;Wang et al 2000). As the quality of life is a multidimensional construct that includes at least physical capacity, psychological well-being, social relationships, and environment (Lin et al 2002), disasters signify devastating physical and psycho-social impacts on human life (Ardalan et al 2011).…”