Vientiane, 18 July 2025 — The Government of Lao PDR has signed a new sovereign disaster risk insurance policy with SEADRIF Insurance Company, introducing an innovative approach to financing public disaster response. The two-year, multi-peril policy provides up to USD 16 million in financial protection against flood, tropical cyclone, earthquake, landslide, and related perils. The policy triggers payouts based on the annual aggregate number of people affected by disasters, as reported through the Government’s established agency, the National Disaster Management Office (NDMO), and its independent reporting framework—as opposed to complex hazard measurements or modelled losses.
This policy builds on Lao PDR’s pioneering advancements in disaster risk insurance across the ASEAN region. Since joining SEADRIF in 2021, Lao PDR has received USD 4.5 million in fast-disbursing payouts. The new policy continues that leadership by embedding financial protection directly into the government’s post-disaster reporting framework under national law. As the number of affected people each year accumulates and crosses pre-agreed thresholds, payouts will be triggered and made within 10 business days.
As one of the first policies globally to use a government reported impact-based trigger at national scale, this agreement also serves as a learning instrument. It will test a new approach that could unlock more context-appropriate coverage across ASEAN. SEADRIF and its partners see this as an essential step toward expanding the toolkit for climate and disaster response, with insights from this experience to inform future product design.
“This is the kind of product governments have been asking for—grounded in their own disaster experience, easy to understand, and fast when it’s needed most,” said Benedikt Signer, Executive Director of SEADRIF Insurance Company. “It’s also a chance to learn together—testing and refining future insurance solutions that meet both government needs and expand what is possible in the market.”
The premium is supported by the World Bank, with funding from the Global Shield Financing Facility (GSFF), and the Risk Finance Umbrella Multi-Donor Trust Fund. This continues the World Bank’s long-standing support to Lao PDR on disaster risk finance. In the event of a payout, funds will be deployed through a pre-agreed contingency plan that complies with the World Bank’s Environmental and Social Framework.
Alex Kremer, World Bank Country Manager for the Lao PDR, said that “with a changing climate and continued deforestation, Laos is becoming increasingly vulnerable to flooding. Access to quick and reliable financing after disasters is therefore extremely valuable.”
Gallagher Re has served as the key technical partner in developing this policy and acts as both reinsurance broker and calculation agent. The parametric structure is backed by thorough analytical work carried out by its team. The policy is reinsured by international markets, with half the capacity from Asia and participation from London, Tokyo, Singapore, Hannover, and Zurich.
This agreement reflects growing momentum among forward-leaning industry partners to bring risk financing solutions closer to the operational needs of governments. It sets a benchmark for innovation grounded in government ownership, clarity, and measurable results–and signals what’s possible when public priorities and private sector capacity align.
“We value the longstanding partnership with SEADRIF and commend the enhancements in the renewed policy, which more effectively address the unique challenges faced by Lao PDR. This collaboration aligns with our Disaster Risk Financing Strategy and strengthens protection for our people against the growing threats of climate shocks. We appreciate the continued support from the World Bank, the Risk Finance Umbrella Program and the Global Shield Financing Facility which has made this renewed policy possible.” — Somxay Keovandy, Deputy Director General of Department of State-Owned Enterprises and Insurance Supervision, Lao PDR Ministry of Finance
“We express gratitude to the trust and farsighted leadership of the Lao PDR Ministry of Finance. We appreciate our partnership with the World Bank, Gallagher Re and the reinsurance community in bringing this enhanced policy to reality. This milestone represents not only a significant achievement for SEADRIF but also an advancement in parametric insurance products. We are committed to serving all ASEAN member countries and making a meaningful impact to protect vulnerable populations and fostering sustainable development.” — Yoshihiro Kawai, Director of SEADRIF Initiative and Board Chair of SEADRIF Insurance Company
“Gallagher Re is proud to have collaborated with SEADRIF on renewing this groundbreaking product. This achievement was underpinned by comprehensive analytical work and close consultations with clients and markets. Our innovative parametric set up further pushes the boundaries of disaster risk finance and represents a solution that is both simple and more reliable. It is particularly well-suited for flood-prone countries and we look forward to further expanding it with SEADRIF in the region.” — Mr. Antoine Bavandi, Global Head of Public Sector, Parametric & Climate Resilience Solutions at Gallagher Re
About the SEADRIF Insurance Company
The SEADRIF Insurance Company is incorporated in Singapore and licensed as a general insurance company to offer financial solutions to member countries that provide protection against disasters and climate shocks. The SEADRIF Insurance Company closely collaborates with members to develop products that help governments better manage the costs when disasters hit.
About the SEADRIF Initiative
SEADRIF is a regional platform that provides participating nations with advisory and financial services to increase preparedness, resilience and cooperation in response to climate and disaster risks. SEADRIF is established and owned by ASEAN+3 countries, with financial support from the Governments of Japan and Singapore and technical support by the World Bank.
For inquiries, please email: contact@seadrifinsurance.com.
For more information and updates, please visit: seadrif.org/the-seadrif-insurance-company/
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