Closing the protection gap
China suffers from severe earthquake exposure. Despite occupying just 7% of the world’s land area, it experienced 35% of earthquakes with a magnitude above 7.0 in the 20th century and has endured 800 earthquakes with a magnitude above M6.0 in the current century so far. The province of Sichuan is particularly exposed because it lies on active fault lines. The average/median household income of Sichuan’s is less than USD 500, and the most vulnerable live in makeshift shelters.
When a severe earthquake strikes, Sichuan depends on the local government budget for disaster relief, with the need far outstripping capacity. No nationwide catastrophe protection scheme is in place. At the same time, local communities' awareness of natural catastrophes and knowledge about how to protect themselves and their assets are extremely low as earthquakes are considered to be a remote risk.
We’ve teamed up with the China Foundation for Poverty Alleviation (CFPA) and employee volunteers from Swiss Re Corporate Solutions to address these gaps in awareness and knowledge. Specifically:
- CFPA will launch a media campaign to raise social awareness on earthquakes in China, particularly in poor villages and towns exposed to earthquake risk. The campaign will also call for individual or corporates donations to support the project.
- CFPA’s in-house experts and Swiss Re Corporate Solutions volunteers will visit selected cities and towns in Sichuanto offer workshops on asset loss prevention and survival training to community members and NGOs.
- Swiss Re Corporate Solutions will use its in-house expertise to provide risk modelling and structure and parametric earthquake insurance cover for the selected cities and towns (as a contribution in kind), the aim being to enable local governments to provide financial cover for poor households exposed to earthquake risk.
GOALS AND EXPECTED IMPACT
The long-term goals of this partnership between CFPA, the Swiss Re Foundation and Swiss Re Corporate Solutions China are to:
- Increase public awareness in China of natural catastrophe loss prevention and survival, especially from earthquakes
- Establish a sustainable and institutionalised disaster prevention and relief mechanism in Sichuan, targeting its poorest communities
- Close the protection gap in Sichuan by designing sustainable parametric earthquake insurance cover
Short-term impacts will include knowledge transfer and financial protection against earthquakes in the participating communities.
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