Together We Stand

[ 123 ] Image: AIDMI Image: AIDMI After a flood destroyed handicraft cloth on his stall, Achyut Baishya borrowed from a microfinance group and is repaying the instalments Rupa Rabha is running an informal street restaurant in Guwahati. Women’s participation in community-based adaptation schemes increases success when policyholders are supported by micromitigation meas- ures such as fire safety, seismic-safe construction practices and business development support. Following the 2013 cyclone Phailin in Odisha, 165 clients were affected, facing loss and damage. The claims were regis- tered to the relevant insurance company. Some 125 clients received claim settlements in amounts ranging from US$30 to US$283 against an annual premium of around US$2.5. An AIDMI study, with support from The Climate and Development Knowledge Network, showed that people affected by Cyclone Phailin who received a claim settlement amount due to their enrolment with Afat Vimo recovered faster, while other non- clients had to cope with economic loss and damage by using parts of their savings or borrowing money from self-help groups, private money lenders and relatives, and from relief aid. Another client impact evaluation of disaster insurance schemes by ProVention Consortium, the International Institute for Applied Systems Analysis and AIDMI in 2010, covering Bangladesh, India and Sri Lanka, showed interest in and willing- ness to pay for disaster microinsurance programmes. The study found that products are now beginning to reach poor clients, many of whom live below the poverty line, are highly indebted and employ limited and problematic coping mechanisms after disasters. The study signalled high demand for disaster micro- insurance after non-insured clients had been given information showing the relevance and pricing of such products as well as the power of organizations to reach more clients simply through outreach. An overwhelming majority (80 per cent) of clients felt that disaster microinsurance should be promoted to others while only a minority (2.3 per cent) thought it should not. Microinsurance offers those affected by disaster a more digni- fied means to cope than relying on the generosity of donors after disaster strikes. 7 Experience shows that the growth of a microinsurance scheme such as Afat Vimo can be attributed to its affordable premium and simple administrative arrangements. The AIDMI experience suggests that the convergence of micromitigation measures with microinsurance and microcredit is important for the sustainability and success of such schemes on the ground. “Efforts to establish discounts in insurance premiums as incentives for risk reduction have not been viably demonstrated in ways that preserve the base affordability of the microinsurance.” 8 . Mitigation measures such as interest-free loans for livelihoods following the first infusion of livelihood relief; retrofitting support for housing (both financial and tech- nical); installation of fire extinguishers; use of cash transfers for creating vital community infrastructure and capacity building for insurance clients with regard to key risk reduction concepts such as drought proofing, disaster resistance construction, early warning and first aid, have all been extremely well received at the community levels. However, they have not been entirely success- ful in convincing insurance providers to offer differentiations in premium amounts. To allow this to happen at a larger scale more effort needs to be made to bring together disaster risk reduction authorities and insurance regulators. T ogether W e S tand