The region of Central Asia and the Caucasus (CAC) is highly vulnerable to disasters caused by the impact of natural hazards. The occurrence of natural hazards in all eight countries of the two sub-regions is very high; substantial parts of the territory are covered by mountains and practically all natural hazards, such as earthquakes, landslides, debris flows, avalanches, floods and droughts, are present. Climate change is expected to exacerbate disasters caused by the impact of natural hazards associated with hydro-meteorological conditions, with associated damage particularly impacting the rural economy. The region is also exposed to a range of technological disasters, such as industrial accidents, 

hazardous mine tailings entering downstream water bodies, and potential downstream impacts resulting from the operation of large water reservoirs. 

The present report “A Study of Catastrophe Risk Financing Options” aims to assess the extent to which the existing intra-country government-funded social safety nets and the private insurance industry can cope with the adverse financial effects of disasters caused by the impact of natural hazards on the regional economy. Based on the outcomes of the assessment carried out in the five countries of Central Asia, the study provides policy recommendations on reshaping the existing post-disaster government social safety net programmes and extending the level of catastrophe insurance penetration for businesses and homeowners.