Across ASEAN, disaster risk is increasingly being treated as a material fiscal risk, prompting finance ministries to move away from reliance on post-disaster budget reallocations and ad hoc assistance.
Instead, insurance and other forms of pre-arranged risk financing are emerging as core tools within public financial management frameworks. SEADRIF Insurance Company Executive Director Benedikt Signer said this policy shift is evident at the regional level, most notably through the institutionalisation of the ASEAN+3 Disaster Risk Finance Initiative as a standing agenda item for senior financial policymakers.
“The move sends a clear political signal to markets, helping to create sustained demand, policy continuity and greater confidence for private-sector participation in disaster risk financing,” he said. At the national level, several ASEAN countries are taking a lead. The Philippines is leading regional efforts by expanding both its domestic insurance market and sovereign risk transfer programmes, while Indonesia is increasingly using insurance as a strategic tool to strengthen public sector risk management.
“Insurers and reinsurers are increasingly rethinking not only who builds exposure models, but also how modelling itself is done, industry participants say. Rather than continuing to expand large in-house modelling teams, many are shifting towards leaner, specialist core teams supported by targeted external partnerships,” Mr Signer said.
When asked about potential data gaps that still exist in modelling flood and typhoon risk in SEA, Mr Signer said data gaps remain most acute in flood risk, despite a wave of new modelling approaches entering the market.
“While these models have improved, many still lag in accuracy and reliability and can be difficult to interpret. For many public-sector users, flood models continue to function as black boxes, limiting trust even when results appear reasonable on average.”
He said the most significant deficiencies are in pluvial flooding, particularly in mountainous and densely urbanised areas.
“In these environments, risk is highly localised- often driven by flash floods or short-duration events, making it difficult to capture using existing data and modelling frameworks,” he said.
These are also the settings where demand for flood protection is highest across ASEAN.