The Organisation for Economic Co-operation and Development has published recommendations for expanding micro-disaster risk finance in Emerging Asia, where most disaster losses remain uninsured and households, small businesses and local governments face substantial financial exposure. It identifies micro-disaster risk insurance and micro-catastrophe bonds as tools that can complement national financing programs by tailoring coverage and payout triggers to local risks and providing rapid liquidity after disasters. Microinsurance already operates at scale, covering 344 million people across 37 countries in 2023, with Asia and the Pacific accounting for nearly 80% of customers. Micro-catastrophe bonds remain niche, but smaller transactions are becoming more feasible. Twenty-four catastrophe bonds of USD 5 million or less were issued between 2020 and 2025, compared with five between 2014 and 2020, while the smallest recorded issuance reached USD 2 million in 2026. The OECD recommends clear regulatory frameworks, streamlined product approvals and appropriate capital treatment to lower participation costs. Governments should also involve communities in product design, improve financial and insurance literacy, and invest in local hazard, exposure and trigger data to reduce mismatches between payouts and actual losses.
2026-09-24OECD
Organisation for Economic Co-operation and Development recommends measures to expand micro-disaster risk finance in Emerging Asia
The Organisation for Economic Co-operation and Development recommends expanding microinsurance and micro-catastrophe bonds to narrow Emerging Asia’s disaster protection gap. It calls for enabling regulation, simpler approvals, appropriate capital treatment, stronger local risk data and greater community involvement. Smaller catastrophe bond issuances and growing microinsurance coverage indicate scope to extend protection to households, small businesses and local governments.