LocationsProtecting Development Through Stronger Disaster Risk Finance Mechanisms
November 19, 2025
Orientation programme on insurance and disaster risk finance
From climate extremes to unexpected crises, 2025 is leaving with a string of warnings that increasing risks and deteriorating financial resilience will negatively impact sustainable development and economic stability of the country
The country diagnostic report, released on 2024, states that Nepal's disaster landscape is impacted by earthquakes, floods, landslides, and droughts, which collectively have caused almost USD 7 billion in damages from 1980 to 2020. Between 2012 and 2020, the Government of Nepal spent an average of NPR 50 billion (USD 0.4 billion) annually on disaster response, which is financially sustainable in the long run.
From climate extremes to unexpected crises, 2025 is leaving with a string of warnings that increasing risks and deteriorating financial resilience will negatively impact sustainable development and economic stability of the country
The country diagnostic report, released on 2024, states that Nepal's disaster landscape is impacted by earthquakes, floods, landslides, and droughts, which collectively have caused almost USD 7 billion in damages from 1980 to 2020. Between 2012 and 2020, the Government of Nepal spent an average of NPR 50 billion (USD 0.4 billion) annually on disaster response, which is financially sustainable in the long run.
Similarly, the damage caused by arson and vandalism during the protests on September 8 and 9 has resulted in insurance claims totaling Rs 23.22 billion. As of 9 October, a total of 3,099 insurance claims had been filed following recent incidents across the country. The need for strong risk-transfer systems has never been clearer.
In 2024, UNDP Nepal, through its global Insurance and Risk Finance Facility (IRFF), conducted a nationwide diagnostic involving government agencies, insurance companies, and other development partners. The findings clearly pointed out that insurance and risk finance are still not well understood in Nepal, and hence there is a lack of evidence-based policy solutions. It highlighted the importance of collaboration between the government, development partners, and the private sector to address increasingly frequent and complex climate and disaster risks.
Similarly, the damage caused by arson and vandalism during the protests on September 8 and 9 has resulted in insurance claims totaling Rs 23.22 billion. As of 9 October, a total of 3,099 insurance claims had been filed following recent incidents across the country. The need for strong risk-transfer systems has never been clearer.
In 2024, UNDP Nepal, through its global Insurance and Risk Finance Facility (IRFF), conducted a nationwide diagnostic involving government agencies, insurance companies, and other development partners. The findings clearly pointed out that insurance and risk finance are still not well understood in Nepal, and hence there is a lack of evidence-based policy solutions. It highlighted the importance of collaboration between the government, development partners, and the private sector to address increasingly frequent and complex climate and disaster risks.
UNDP and NDRRMA respond with a national orientation
To help address this gap, UNDP Nepal, through its global Insurance & Risk Finance Facility (IRFF), and the National Disaster Risk Reduction and Management Authority (NDRRMA) convened a two-day Orientation on Insurance and Disaster Risk Finance (DRF) for senior government officials on 14–15 November 2025.
Over three dozen participants from National Natural Disaster Risk Reduction Authority (NDRRMA), the Ministry of Finance, Ministry of Home Affairs, Ministry of Agriculture and Livestock Development, Ministry of Federal Affairs and General Administration, Ministry of Health and Population, Ministry of Urban Development, Ministry of Energy, Water Resource and Irrigation, National Insurance Authority and Rastriya Beema Company Limited took part in the orientation session.
The training discussed concepts such as risk layering, sovereign risk-transfer mechanisms, the role of reinsurance and misconceptions about insurance and public finance. It was highlighted how insuring critical government infrastructure could drastically reduce fiscal shocks and accelerate recovery.
International lessons from Turkey’s Catastrophe Insurance Pool and India’s agriculture insurance systems helped participants see what is possible in Nepal.
One of the most useful sessions centered on the recent public infrastructure damage following the protest in September 2025. Officials discussed how gaps in insurance coverage meant that hundreds of millons of rupees in losses must now be covered entirely by the state.
Looking ahead: From reactive spending to resilience-building
By the end of the programme, many participants expressed renewed commitment to strengthen Nepal’s financial resilience. The orientation programme was a significant step toward shifting Nepal’s disaster management model—from reactive, post-disaster expenditure to strategic, forward-looking financial resilience.
"When public assets are protected, development is protected. And when development is protected, people—especially the most vulnerable—are protected." ER. Dinesh Bhatt, Chief Executive of NDRRMA
“When disasters strike, the question is always: ‘Where will the money come from? Risk financing helps us answer that question before disaster hits.” — Julien Chevillard, Deputy Resident Representative, UNDP Nepal.
For Nepal, a country that has rebuilt itself countless times, this shift could be transformative. It means fewer interruptions to critical services; faster and more equitable recovery; and better safeguarding progress—for today and for future generations.
Ms. Roshani Shretha, Joint Secretary at NDRRMA , reiterated the government's commitment to delivering risk finance solutions, mentioning that the government has already initiated the development of a Risk Management Framework. In view of Nepal’s graduation from Least Developed Country status in 2026 and likely decline of grants and concessional loans, government needs to find suitable risk transfer instruments to enhance country’s financial resilience; said Mr. Dharma Swarnakar, UNDP’s Assistant Resident Representative.
Moving toward a more robust system of insurance and disaster risk finance is critical to ensuring that development gains are protected and recovery can be faster, predictable, and fiscally sustainable. It means fewer interruptions to critical services; faster and more equitable recovery; and better safeguarding progress—for today and for future generations. Most of all, it means Nepal no longer has to pay the price twice.
