Natural disasters caused by climate change increase the need for risk management of disasters in an effective way. The project "Technology Transfer for Climate Resilient Flood Management in the Vrbas River Basin" implemented by the UNDP, financed by the Global Environment Fund, supports the establishment of a system of insurance against natural disasters in Bosnia and Herzegovina.

The possibilities for establishing a risk management model for natural disasters were presented to representatives of the Ministries of finance, insurance companies and insurance associations at the round table titled: "Flood/natural disasters insurance models" organized in Sarajevo and Banja Luka. The focus was on calculating the insurance tariffs according to risk zones, ie, hazard maps and presentation of the results of the conducted willingness to pay for insurance survey for households, public institutions, enterprises and agricultural producers.

Inevitably, the introduction of compulsory insurance against catastrophic disasters such as floods, earthquakes, droughts says one of the lecturers prof. dr. Jelena Kočović explaining: "Insurance is in the interest of all citizens, as well as the state, because in this case, the budget is relieved, and the risk of natural disasters is transferred from the state to insurance companies."

Within the UNDP project, a survey was conducted covering a sample of 500 business entities, 100 public institutions, 500 agricultural producers and 1,000 households taking into account the entity, the river basin, the municipality, the exposure to certain risks, as well as the previous experience regarding the damage suffered from natural disaster with a special overview of the floods. The Insurance survey took into consideration the following: insurance of houses, apartments in the condominium, buildings, objects in facilities - equipment and supplies.

Prof. dr. Safet Kozarevic professor at the Faculty of Economics, University of Tuzla states „The survey was aimed to get information about the readiness of households and businesses to purchase insurance against natural disasters. One of the conclusions is that both groups are not sufficiently informed about the benefits they gain by insurance, but also there are the needs for insurance and they have been recognised. There is interest in intorduction of compulsory insurance, since  the insurance would be more favorable in this way. "

Zlatan Filipovic director of "Bosna Re" Reinsurance, in behalf of the Association of Insurance Companies of FBiH highlighted  that three key risks to which all households in BiH are exposed to are considered - floods, earthquakes and landslides, and  the concept implies insurance of these three hazards.

"According to our calculations it takes about 500 million BAM total protection to be able to protect against disasters that occur once in 200 years, wheter it is a flood that was in 2014 or the earthquake that occurs once in 250 years," states Filipovic.

A significant potential for the development of a package of natural disaster insurance products for all four segments was identified and a positive attitude was identified regarding the compulsory insurance against the natural disasters at a lower price than the commercial.

The expected premium and insured sum for all four segments are estimated for the construction building and things in it (and supplies for businesses) for a package of insurance products from the flood from rivers, landslides and earthquakes. The expected premium and the insured sum were established for agricultural producers for a package of insurance products from floods from watercourses, droughts, hail and other hazards.

"This survey can the basis for the development of a model of natural disasters package product in various segments - households, public institutions, companies and farmers - in order to protect them," said Raduška Cupać, project manager of the UNDP project.

In the following period, the results of the survey will be presented to the decision makers and a public awareness campaign on possible insurance models will also be organized.

UNDP's project "Technology Transfer for Climate Resilient Flood Management in the Vrbas River Basin" is implemented in cooperation with the Ministry of Foreign Trade and Economic Relations of BiH, the Ministry of Spatial Planning, Construction and Ecology of RS, entity ministries responsible for water management and civil protection, and 14 municipalities in the Vrbas River Basin.