Typhoon-Prone Philippines Plans New Insurance Post-Doksuri

The Philippines, recovering from damage wrought by Typhoon Doksuri, is seeking a new insurance plan as protection against future calamities after its catastrophe bond lapsed.

(Bloomberg) — The Philippines, recovering from damage wrought by Typhoon Doksuri, is seeking a new insurance plan as protection against future calamities after its catastrophe bond lapsed.

“We no longer have a cat bond,” National Treasurer Rosalia de Leon said in reply to a query via mobile phone on Thursday. “We are proposing a national indemnity program in 2024,” she said. 

About 2 billion pesos ($37 million) to cover the payment of a premium is being proposed for the 2024 national budget, De Leon said.

The Philippines received a $52.5 million payout, or 35% of the principal, from a World Bank-issued catastrophe bond after Typhoon Rai hit in December 2021. That bond, issued in 2019, lapsed last year.

The proposed new insurance plan is intended to protect the Southeast Asian nation from infrastructure losses caused by natural disasters. It seeks to provide financial protection for strategically important assets like school buildings, hospitals, roads and bridges to ensure immediate funding for the repair of those critical assets.

Read: Doksuri Moves Toward China; Taiwan Shuts Schools in South, East

On average, the Philippines is expected to incur $3.5 billion in asset losses annually from typhoons and earthquakes alone, according to the World Bank. The country is hit by an average of 20 typhoons every year.

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