Financial Management of Earthquake Risk

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Earthquakes are one of the most destructive natural perils and can lead to severe economic, social and environmental impacts. Rapid urbanisation, the accumulation of assets in seismic areas – and, to some extent, increasing induced seismicity – have led to an increasing amount of exposure to earthquake risk in many parts of the world. The financial management of earthquake risk is a key challenge for individuals, businesses and governments in developed and developing countries, and the G20 Finance Ministers and Central Bank Governors and APEC Finance Ministers have recognised the importance of building financial resilience against these risks.

This report applies the lessons from the OECD’s analysis of disaster risk financing practices and the guidance in the OECD Recommendation on Disaster Risk Financing Strategies to the specific case of earthquakes. It provides an overview of the approaches that economies facing various levels of earthquake risk and economic development have taken to managing the financial impacts of earthquakes.

Documents and links

Financial instruments for managing risks related to climate change

Disaster Risk Financing: A global survey of practices and challenges

Disaster Risk Financing in APEC Economies: Practices and Challenges

G20/OECD Methodological Framework on Disaster Risk Assessment and Risk Financing

Financial Management of Large-scale Catastrophes

Keeping schools safe in earthquakes