Enhancing Disaster Resilience: Insights from the Cianjur Earthquake to Improve Indonesia’s Risk Financing Strategies

Felix Wisnu Handoyo, Syarifah Aini Dalimunthe, Purwanto Purwanto, Ikval Suardi, Chitra Indah Yuliana, Erla Mychelisda, Irwanda Wardhana and Agus Eko Nugroho

SAGE Open, 2024, vol. 14, issue 2, 21582440241256777

Abstract: Earthquakes pose a growing threat to Indonesia, and the country’s limited resources for risk mitigation propagate its vulnerability. The heavy reliance on ad-hoc government relief for risk transfer is not sustainable. This study aims to provide scientific evidence for formulating disaster risk financing strategies in Indonesia, focusing on active fault areas with high population density. By analyzing people’s responses to risk financing after the November 21, 2022, earthquake in Cianjur Regency, the study examines emotional reactions, risk perceptions, and willingness to participate in risk insurance. The findings highlight three major issues: low participation in insurance programs due to limited insurance literacy and enrollment, the significant financial burden on the government from material losses, and the critical need for disaster insurance schemes for homes and fixed assets. The study emphasizes the urgency of implementing disaster risk financing in Indonesia, with a focus on the vulnerability of poor and low-income households. It also stresses the importance of enhancing disaster risk governance and promoting public-private partnerships on small-scale insurance schemes.

Keywords: Indonesia; risk-transfer mechanisms; disaster management; disaster risk financing; insurance schemes (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:14:y:2024:i:2:p:21582440241256777

DOI: 10.1177/21582440241256777

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