Together We Stand

[ 122 ] The Afat Vimo scheme protects its clients from the impacts of hazards on their livelihoods and assets by providing pre- determined cash payouts after a disaster. This is carried out in return for premiums, which are paid to the insurance compa- nies through a local partner agency. By bundling several hazards in one contract, premiums pay for better understood hazards such as floods and cyclones, with further help to reduce the effective premium rates for less predictable and lower frequency ones such as earthquakes. The scheme covers damages or losses on a wide range of natural hazards includ- ing, but not limited to, earthquakes, floods and cyclones, lightning strikes and landslides. Afat Vimo makes some progress in bringing together insur- ance providers and livelihood recovery support in times of disaster. Afat Vimo is a partner-agent microinsurance model, where poor communities and commercial and public insur- ance companies cooperate. The role of AIDMI in the Afat Vimo scheme is that of both facilitator and intermediary. AIDMI does not serve as an agent or collect a commis- sion. The scheme is promoted in areas where AIDMI or its partner NGO or community-based organization has ongoing community development work. This uniquely designed operational feature allows this product to reach the most vulnerable and poor, making it effective in urban areas with marginalized populations. Thus, the initiative is also in line with the recent Government of India’s development agenda for financial inclusion of poor and vulnerable people. Both the Hyogo Framework for Action 2005-2015 and the Sendai Framework for Disaster Risk Reduction, adopted in 2015, have identified risk transfer as one of the key priori- ties for governments and civil society. The smart city mission launched by the Government of India offers the perfect plat- form to develop such mechanism. AIDMI’s work has been instrumental in capturing such empirical evidence from the ground. The innovation is an input to the World Humanitarian Summit consultations. An impact study of disaster insurance after 2013 Cyclone Phailin found that disaster insurance was clearly welcomed by clients and there was demand to extend it. 6 Schemes such as Afat Vimo, a financial tool for risk sharing, reduce the poli- cyholders’ underlying risks and offer financial protection. Moreover these schemes can build resilience to future shocks Image: AIDMI Mr and Mrs Sahoo had been operating their vegetable business for more than a decade, when 2013 Cyclone Phailin resulted in damage and income loss. They are gradually recovering by using their savings T ogether W e S tand