World Meteorological OrganizationWorking together in weather, climate and water

Background on Weather, Hydrological and Climate Services for Financial Risk Transfer markets

Maryam Golnaraghi, Ph.D.

Chief of Disaster Risk Reduction Programme

First Meeting of the WMO Expert Advisory Group on Financial Risk Transfer (EAG-FRT I)

13-14 December 2011

WMO HQ, Room 8 Jura

Geneva, Switzerland

www.wmo.int

WMO

Increasing Number of Meteorological, Hydrological and Climate Hazards (1980 – 2010)

Source: Munich Re Topics Geo 2010

Socio-economic Impacts of Climate-Related Extremes on the Rise !

Intensity

Frequency

Heatwaves

Heavy rainfall / Flood

Strong Wind

Water ResourceWater ResourceManagementManagement

PeoplePeople AgricultureAgriculture

EnergyEnergy

Urban areasUrban areas

Need forMulti-sectoral risk

management

Drought

TransportationTransportationAral SeaAral SeaHazard intensity and frequency increasing linked

to climate variability and change!

Vulnerability and exposure on the rise !

Three international negotiation processes related to Disaster and Climate Risk Management and links

to Financial Risk Transfer

• Hyogo Framework for Action (HFA) – United Nations International Strategy for Disaster Reduction (UN-ISDR)

• United Nations Framework Convention on Climate Change (UNFCCC)

• Global Framework for Climate Services (GFCS) (WCC-III)

Hyogo Framework for Action 2005 – 2015Weather, Hydrological and Climate Services for Comprehensive

Risk Management Decision Making

Risk TransferRisk Assessment

Hazard databases

Hazard statistics

Climate forecasting and trend analysis

Exposed assets & vulnerability

Risk analysis tools

PREPAREDNESS: early warning systems emergency planning

PREVENTION and MITIGATION: Sectoral Risk Management Medium to long term planning (e.g. zoning, infrastructure, agriculture…)

CAT insurance & bonds

Weather-indexed insurance and derivatives

Other emerging products

Risk Reduction

Information and Knowledge SharingEducation and training

Governance and Institutional Framework

(Multi-sector, Multi-level, Multi-Hazard)

21

4

3

Hazard / Risk Assessment (historical and forward looking)

Hazard Analysis and

Mapping

Exposure and

Vulnerability

Potential Loss

Estimates

This information is

critical for decision-making

and development of

strategies to reduce the risks

Heavy Precipitation and flood mapping

Assets: population density agricultural land urban gridInfrastructureBusinessesetc

Number of lives at risk

$ at riskDestruction of buildings and infrastructure

Reduction in crop yields

Business interruption

etc

Need for historical and real time data

Statistical analysis tools meteorological,

hydrological and climate forecasts and trend

analysis

Multi-Hazard Early Warning SystemsNational to local disaster risk reduction plans, legislation and coordination mechanisms

1 2

3 4

Recent advances in climate forecasting and trend analysis provide unprecedented opportunities to support ….

• Water resource management• Land zoning • Infrastructure and planning (urban, rural)• Agricultural productivity and food security• Health epidemics• Insurance / Finance • Tourism

Sectoral Risk Assessment and Management

(Re)Insurance Markets and other Alternative Risk Transfer Mechanisms

What type of Financial tools?

Which Risks? Who Could Benefit?

Requirements for Hydro-Met and climate Services?

Traditional and Alternative Risk

Transfer tools and schemes

Governments

Companies

Individuals

Other

Historical and real-time data

Sub-seasonal, Seasonal to inter-annual climate

forecasts

Decadal climate trend analysis

Long term trend analysis

Financial risks

WMO DRR Crosscutting Programme

To leverage expertise, resources and capacities of WMO Members, technical programmes and operational network and to build alliances with the UN and other partners to support capacity development

for disaster risk reduction decision-making at all levels.

Disaster Risk ReductionDisaster Risk Reduction: Life & economic losses : Life & economic losses

USERs: Disaster Risk Management, Agriculture, Water USERs: Disaster Risk Management, Agriculture, Water Resource Management, Infrastructure, Urban Resource Management, Infrastructure, Urban

development, Health, Insurance, etcdevelopment, Health, Insurance, etc

Research and modelingResearch and modelingObservations and Observations and datadata

Forecasting and analysis toolsForecasting and analysis tools

Regional aspects

Regional aspects

Products and Service Delivery Products and Service Delivery

International aspectsInternational aspects

Capacity Building

Integrated approach to Delivery of Weather and Climate Services for Target Sectors

National aspects,National aspects, DRR Governance and institutional DRR Governance and institutional framework changing!framework changing!

Integrated approach to Delivery of Weather and Climate Services for Target Sectors

National Meteorological Services

Core operational componentsDRR Products &

Services

Observations and monitoring

Operational Nowcasting,

Forecasting and other Analysis

Data & Analysis

Warnings, forecasts and other value-add products

Technical Advisory Services

Telecommunication Infrastructure and dissemination to Users

Human Resource Development & Training

Data Management Systems

ETC…

Quality Management Systems (QMS)

Other National Technical and SectoralImplementing Partners

Hydrological Service

Ocean Services

Health Services

Space Agency National Users

Sectors:- Transportation

- Health

- Food & Agriculture

- Water Management & Safety

- Coastal Zone Management

- Etc…

National Governance and Policy Makers

Local Governments

Disaster Risk Management Agencies

General Public

Media

Private Sector

Non Governmental Organizations (NGOs)

Etc…

Service Delivery

Requirements & Feedback

Global Regional Specialized Meteorological, Climate Centers (RSMCs and RCCs)

and Space Agencies

Nat

ion

alR

egio

nal

2

45

1 National DRR Governance and Institutional Frameworks

3

6

7

SOPs

SOPs

GTS, WIS

Need for significant Capacity development of NMHS for delivery of meteorological, hydrological and climate

services

• 70% need restructuring of national policies and legislation and clarification or roles of NMHS

• 67% full or some modernization of infrastructure (observations, operational forecasting, telecom, etc))

• 80% technical and management training

• 80% strengthening or building multi-sectoral partnerships

WMO DRR Survey (2006)

Identification and documentation of good

practices(Policy, institutional, technical operations,

products and services, etc. )

Coordinated National and

Regional Projects

Development of guidelines,

standards, tools, methodologies and

training programmes

Monitoring, Evaluation

and Feedback

Knowledge Development

Technical Commissions, Programmes and

Technical Partners

Operationalization and Capacity Development

Members, RAs, DRR partners and Regional

centers

Strengthening Services through Linking Knowledge and guidelines to Capacity Development Projects

DRR Implementation ApproachThematic Guideline and good practices

• Thematic Expert Advisory Groups (Users, partners, WMO Members) to guide the overall approach– Expert Advisory Group on MHEWS (will continue)

– Expert Advisory Group on Hazard/Risk Assessment

– Expert Advisory Group on Financial Risk Transfer

– Task Team for provision of Met/Hydro and Climate Services for Humanitarian Planning, Preparedness and response

• Systematic engagement of WMO technical commissions/programmes and Membrs

• Leveraging with other partners’

South East Europe (2007-

present)

8 countries

South East Asia (2010 –

present)

6 countries

Central America and Caribbean

(2010- present )

Costa Rica and Mexico and all

Caribbean Islands

Comprehensive Capacity Development DRR and Adaptation Projects Underway

Since 2010 with Members

& UN

Haiti

Partners: WMO, World Bank, UN-ISDR, UNDP, Regional Socio-economic Groupings and regional DRR agencies, Regional Centers, WMO Regional Association, NMHS, National DRM agencies and economic line ministries

South Asia (early

discussion stage)

5 Countries

Background related to establishment of EAG-FRT …..

• Traditional and alternative risk transfer markets…

• Legislative developments in developed countries (e.g., US, UK, EU)

• Penetration of FRT to developing and least developed countries

• Changing risk profiles linked to climate change• Expressed need from the sector for weather,

hydrological and climate services

Background related to establishment of EAG-FRT …..

• WMO consultations (2007 – 2011): • Expert Meeting on “Requirements of the Catastrophe Insurance and Weather

Risk Management Markets”, 5 - 7 December 2007, WMO Headquarters (http://www.wmo.int/pages/prog/drr/events/cat-insurance-wrm-markets-2007)

• Plenary Panel on Climate Extremes, Early Warning and Disaster Risk Reduction at WCC-III (31 August – 4 September 2009 (http://www.wmo.int/wcc3/page_en.php)

• Panel on “Climate Services, Catastrophe Risk and Capital Markets – GPDRR III, 11 May 2011 (Geneva, Switzerland), (http://www.preventionweb.net/globalplatform/2011/programme/side-events/v.php?id=194)

• Participation in various user forums

• WMO Executive Council deliberations: 58th, 59th, 60th sessions of Executive Councils

• Request of the 16th WMO Congress (May 2011)

Establishment of the WMO Expert Advisory Group on Financial Risk Transfer

(Overall Goals)

• Concrete recommendations for priorities, targets and deliverables between 2012 and 2015– Good practices, lessons learned and training and

awareness raising among the meteorological, hydrological and climate communities

– Research– Needs and requirements for targeted (data,

forecasting, etc) operational services and service delivery models

– Partnerships and alliances with user community– Pilots and implementation

First Meeting of the WMO Expert Advisory Group on Financial Risk Transfer13 – 14 December 2011 (Expected Outcomes)

• recommendations for priorities, targets and deliverables between 2012 and 2015

• Final Terms of Reference of EAG-FRT• Criteria for good practice identification of cases

for documentation in 2012 first guidelines and training

• Outline of the EAG-FRT work plan (2012 – 2013)

• Date of the 2nd meeting of the EAG-FRT in 2012

http://www.wmo.int/pages/prog/drr/events/EAG-FRT/FRT1/index_en.html

First Meeting of the WMO Expert Advisory Group on Financial Risk Transfer

13 – 14 December 2011 (meeting web page)

First Meeting of the WMO Expert Advisory Group on Financial Risk Transfer

13 – 14 December 2011 (Documents)

• Doc 1: Agenda

• Doc 2: Background

• Doc 3: membership and Draft TOR of EAG-FRT

• Other background documents

First Meeting of the WMO Expert Advisory Group on Financial Risk Transfer

13 – 14 December 2011 (Sessions)

• Session 1: Opening and introduction • Session 2: Disaster Risk Financing and Financial Risk

Transfer Markets Related to Weather, Hydrological and Climate Extremes in a Changing Climate (User Perspectives)

• Session 3: Research and Operational Meteorological, Hydrological and Climate Services to Support Target FRT Markets and Lessons Learned

• Session 4: Finalization of the Terms of Reference of ERG-FRT and the work plan

http://www.wmo.int/disasters

Thank YouFor more information please contact:Dr Maryam Golnaraghi

Chief of Disaster Risk Reduction Division

World Meteorological Organization

7 bis, Avenue de la Paix

P.O. Box 2300

CH-1211 Geneva, 2, Switzerland

Tel: (+41 –22) 730-8006

Fax: (+41 –22) 730-8128

Email:disasters@wmo.int