Journal Article

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

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

2024

Overview

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. Plain language summary This study explores the aftermath of the Cianjur earthquake in Indonesia in November 2022, focusing on the vulnerability and socio-economic impacts on affected communities. It reveals that despite frequent earthquakes, many locals lack disaster preparedness knowledge. The study also highlights the potential of insurance schemes to protect valuable assets like homes, but participation varies due to factors like income, insurance knowledge, and government relief availability. The study proposes several recommendations to improve disaster risk financing mechanisms. These include conducting further studies to create a disaster risk index, enhancing educational interventions to increase insurance literacy, and improving governance by clearly defining authority between central and local governments. The study also suggests conducting pilot projects to test insurance schemes and exploring public-private partnerships for disaster risk financing. These steps aim to foster a more resilient society that can better cope with the socio-economic consequences of natural disasters.

• Publisher: SAGE Publications,SAGE PUBLICATIONS, INC,SAGE Publishing
• Subject: Assets / Disaster insurance / Disasters / Earthquakes / Economic impact / Emergency preparedness / Emotional Response / Emotional responses / Enrollments / Financing / Governance / Government / Households / Housing authorities / Insurance / Literacy / Local government / Low income groups / Mitigation / Natural disasters / Participation / Partnerships / Pilot projects / Population density / Public finance / Public private partnerships / Public sector private sector relations / Resilience / Risk / Risk perception / Scientific evidence / Socioeconomic factors / Urgency / Vulnerability