INSURANCE SUPERVISORY AUTHORITY

MINISTRY OF FINANCE

VIETNAM

28 TRAN HUNG DAO STREET,

HOAN KIEM DISTRICT, HANOI

email: vubaohiem@mof.gov.vn

CONTENT

1. Catastrophic risk management strategies

2. Assessment of needs, prioritisation of resources,

monitoring and evaluation of efforts

3. Economic effects of disasters, insurance coverage

and other financial management tools

4. Roles and responsibilities in natural hazard

awareness and disaster risk reduction education

5. Natural hazard awareness and disaster risk reduction

education initiatives and related communication

techniques and methods

6. Three-step approach

1. Catastrophic risk management strategies

Developing and implementing a comprehensive catastrophic risk management strategy to cope with natural hazards at national level(Including natural hazard awareness and disaster risk reduction education)

2-5% of government’s annual budget used for disaster contingency funds(Mainly used for rebuilding or repairing damaged infrastructure)

Public resources was allocated yearly to support natural hazard awareness and disaster risk reduction education initiatives

2. Assessment of needs, prioritisation of resources, monitoring and evaluation of efforts

Vietnam has given technical assistance by Asean Development Bank (ADB) to run a pilot project on agricultural insurance

We do survey and assess agricultural risks.

Heavy rainfall from storms and typhoons

can cause serious problems with

flooding, erosion, landslides, and salt-

water contamination

Water-related disasters are

the most frequent and most destructive of the natural hazards

3. Economic effects of disasters, insurance coverage and other financial management tools

Natural hazard awareness and disaster risk reduction education is not to be cared appropriately.

However we concentrated on both the weather forecast and annoucing the economic consequences after each disaster.

State Contingency Budget Lines:

All levels of government are required to set aside 2-5% of their annual budget as disaster contingency funds.

In case of a natural disaster, these funds are mainly used to rebuild or repair damaged infrastructure. Households that are victims of disasters may be eligible for some compensation for deaths or damage to their home from government contingency funds.

Flood and Storm Prevention Funds

Disaster relief funds:

- provincial level

- annual contribution of households and businesses

- for flood mitigation and emergency response, and recovery activities.

- ineffective and under-funded in many provinces because of difficulty in enforcement of contribution

- mainly used for emergency response equipment and training; limited distribution of food aid based on post-disaster assessments.

Post-disaster Credit

Credit schemes ofthe Vietnam bank forsocial policy and theVietnam Bank forAgriculture and RuralDevelopment provideloans for victims withlow interest rates

Not effective:

- Credit programs often target only at certain commercial activities, such as rice production

- Households have some difficulty repaying their loans as their production may be less than what it was prior to the disaster

International Assistance:

Average USD 9.5 mil a year from 2000 to 2003, cover a portion of the recovery costs

Natural disasters:

- Particularly acute rural areas (80% population)

Around 70% workforce (80% of all households) working in agriculture, forestry, or aquaculture sector.

- Take a heavy toll on agriculture, livestock production, and fishing

- Agricultural insurance hardly exists in Vietnam

Less than 1% of the agricultural production area has any insurance coverage.

Expectation of receiving relief from international donors and the Government

Erode the people’s willingness to pay for insurance since they assume of receiving free assistance.

The ineffectiveness of the flood funds in meeting the

needs of households may also create more reluctance

to pay for flood insurance or make a contribution to

any other risk management scheme

Depending on assistance can be very risky because of no guarantee of compensation or timely assistance

Government’s responsibility to take care of those who are affected by disasters

4. Roles and responsibilities in natural hazard awareness and disaster risk reduction education

- Legal documents on damage recovery, loss reduction

- A steering committee from central to local to prevent natural disasters

- Support from bank and insurance enterprises: compensation, giving loans with low interest rate

The role of civic sector:

- Get natural hazard and disaster risk reduction knowledge by themselves.

- Via syllabus for junior students and above (not to be cared appropriately).

- International organisations (GRET, CARE, OXFAM...) give technical supports such as:

+ loans for the poor’s programs

+ saving programs

+ training schemes for saving group and other public groups.

5. Natural hazard awareness and disaster risk reduction education initiatives and related communication techniques and methods

- Informational websites, simulation and drills are often used to increase hazard awareness and risk reduction education initiatives These initiatives mainly targeted on population at large (Propaganda, simulation and drills are the best effect approaches in our condition).

- Communication of information on natural hazard exposures accompanied with practical illustrations of the actions that can be taken to reduce risk and of the expected benefits

6. Three-step approach

Our strategy consistent with the approach inThe OECD Policy Handbook

Improve knowledge of the key features of the relevant natural hazards and disaster risks;

Identify the behaviour and perception changes that the strategy is aimed at inducing in the target audiences (e.g. the type of risk reduction measures that can be adopted at different levels of government and society); and,

Identify the most appropriate tools and methods to convey the information and to educate stakeholders and induce action.

Thank you

for

your attention!