Governments, non-profit groups and the private sector must learn from the “transformation of the insurance industry” to reduce disaster risk, according to the UK Government’s chief scientific adviser.

More people are at risk of natural hazards than ever before, particularly in developing countries, a report by Professor of Applied Population Biology Sir John Beddington warns.

The number of people living on floodplains in Asia is expected to rise from 30 million to at least 83 million by 2030, while the number aged over 65 in the same regions will nearly triple by 2040.

The report – Reducing the Risks of Future Disasters: Priorities for Decision Makers – was commissioned by the Office for Science’s Foresight program to improve understanding of natural disasters and develop practical solutions.

While it is possible to stabilise the impact of disasters, this requires a different approach and a “change in culture” of how risk is viewed, Sir John states.

New scientific methods could improve how disasters are forecast and assessed, the report says, citing the insurance industry as a leading example.

“Disaster risk reduction needs to learn from the transformation the insurance industry has made over the past 30 years and to move to a situation where the view of the future is firmly rooted in science-based risk models.

“The insurance sector is one that has enthusiastically embraced modern methods of risk pricing that use science for hazard anticipation. In some markets the insurance industry is a driving force for measuring exposure and vulnerability.”

Reinsurance should play a greater role in risk reduction, the report says. Remittance flows are expected to rise to $US467 billion ($446.4 billion) by 2014, while sub-Saharan countries may raise more than $US5 billion ($4.7 billion) from diaspora bonds.

“Modern financial instruments can overcome the fundamental limitation of informal risk sharing. They can access much larger risk pools so shocks that are covariant at the local level become idiosyncratic in the larger pool.

“For example, if reinsurance makes risk-sharing effectively global, then even a severe drought can be managed.”