Image by Arek Socha from Pixabay.
As intensifying disaster risks across south-east Asia weigh on public finances, insuring against climate shocks is increasingly the domain of finance ministers, said a regional insurer.
“Across the region, there’s a real shift where the ministries of finance step up and say, this is not a civil protection problem, this is a fundamental fiscal problem,” said Benedikt Signer, executive director of the Southeast Asia Disaster Risk Insurance Facility (Seadrif), a risk-pooling facility formed by Asean nations, Japan and the World Bank in 2019 to offer disaster cover to member states.
“It’s not only about disaster response, it’s about attracting investment, it’s about protecting supply chains, it’s about protecting economic growth”.
Signer was speaking at the Bloomberg Sustainable Business Summit in Singapore on 22 July.
Between 2015 and 2020, disasters cost Asean countries – which are among the least insured against extreme weather risks – over US$11bn. The region is now bracingfor an extreme El Niño, where hotter, drier weather could further push up already inflated energy, transport and food bills linked to the Iran war.
Complexity in the way of closing protection gap
Signer noted that complexity in traditional insurance products, not a lack of education, is often to blame for the chronic protection gap in the region.
“What I always find interesting when we talk about the protection gap is the conclusion that people writ large just don’t know they need insurance. We need to educate them better,” said Signer.
He noted that most industries might look to improve their products if nobody is buying them and the insurance industry needs to do the same.
“In the insurance industry, we have to be honest about [whether we are] actually offering something that’s easy, that’s fit for purpose – whether it’s for the public sector or private sector – to adopt, roll out and actually use for risk management,” Signer said.
“We expect the public sector to come out of their comfort zone to learn insurance language and products. I feel insurance markets also need to come out of their comfort zone. We need to find the middle ground”.
Signer was responding to a remark by insurance broker Aon’s Asia Pacific chief executive Jennifer Richards, that parametric insurance – where pay-outs are triggered by pre-defined data triggers – is still typically regarded as a secondary product that supports traditional products, like property insurance.
Unlike traditional private insurers, Signer said that Seadrif’s work primarily starts with parametric insurance because “it’s often easier to understand and easier to set up” with the member government it works with.
In May, Seadrif, alongside the UN’s Food and Agriculture Organisation, launched the region’s first anticipatory drought insurance pilot in Laos, where payouts to the country’s ministry of finance will be triggered by early signals of elevated drought risk. Drought is the single largest disaster risk in Laos and erases nearly US$673mn, or 3.5% of the country’s gross domestic product, each year.
The Philippines, which ranked the most disaster-prone country last year, is currently working with Seadrif on its public asset insurance initiative. The insurer is also working closely with Indonesia, said Signer.
Case for ‘dumb’, decision-ready data
While Aon’s Richards also spoke about innovative uses of artificial intelligence to draw out more insights from big data, Signer argued that these insights need to be translated into decision-ready information that governments can confidently rubber stamp, to increase public sector uptake.
“We developed our own insurance product with… very simple, dumb data, not big data. We are triggering an insurance product against the number of people affected by disasters, as reported by the government,” said Signer. “It’s data that the government already uses for decision-making. It’s not something new. It’s not a black box.”
“If you’re in the public sector and you have to make a decision between investing in schools today or protection tomorrow, it’s a very hard trade-off to make… If you don’t have the right decision-ready information, we are not going anywhere.”
Signer also stressed that ultimately, insurance – while important as a risk pricing tool – is insufficient to build resilience throughout an economy.
“Fundamentally, everyone has to invest in resilience and risk reduction, then insurance can help to manage that residual risk and importantly, help to drive resilience through all business decisions beforehand,” said Signer.
In the end Signer says insurance is simply “a pricing tool” for risk.
“It makes risk visible. It puts an ownership on risk. But it has to be used to drive resilience into everything else”.
This page was last updated July 27, 2026
Written by
Gabrielle See is an award-winning journalist based in Singapore who has written for Green Central Banking since 2025. She has covered the intersections of finance, geopolitics and energy transition in Asia over the past five years for regional and international publications, including CNBC, Eco-Business, Southeast Asia Globe and the Business Times.
