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What is Disaster Risk Finance (DRF)?


The financial losses caused by natural disasters continue to rise, and developing countries experience the greatest impacts. Natural disasters generate significant fiscal risk and create major budget volatility. Even countries with robust disaster risk management programs can still be highly exposed to the economic and fiscal shocks caused by major disasters. 

Disaster Risk Finance (DRF) is a growing discipline that addresses the fiscal impacts and economic losses caused by natural hazards (e.g. cyclones, droughts, earthquakes, floods) and supports countries to increase their financial resilience to natural disasters.

The Disaster Risk Financing and Insurance Program (DRFIP) helps countries ensure that their populations are financially protected in the event of a disaster. Through funding and expertise, DRFI supports countries to develop and implement tailored financial protection strategies that increase the ability of national and local governments, homeowners, businesses, agricultural producers, and low income populations to respond more quickly and resiliently to disasters.  DRFIP has helped governments, businesses and households bring together financial, analytical, advisory and convening services of the World Bank group in more than 60 countries.