The Asia-Pacific region faces escalating financial risks as disasters and climate change compound economic challenges. As reported by the UN ESCAP in 2024, over the past five decades, multi-hazard disasters, including climate-related disasters, have claimed over 1 million lives, caused $485 billion in damages, and affected 3 billion people across the region. Simultaneously, the International Labour Organization (ILO) 2024 report shows that nearly half the region’s population lacks an adequate economic safety net, with critical gaps in low- and middle-income countries.

Given the heightened risk, strengthening disaster risk finance (DRF) is crucial to enhancing financial resilience and mitigating economic shocks. Despite support from international finance institutions (IFIs), such as the International Monetary Fund (IMF) and World Bank, their initiatives often miss country-specific needs, underscoring the need for a tailored DRF assessment framework to enhance financial resilience in developing countries. The G20 has recognised this urgency and prioritised strategies to address shock-induced challenges over the past three years by managing financial volatility and strengthening the global safety net. This brief positions the G20 as a pivotal actor in integrating DRF into the global financial architecture and reforming how countries work together. The recommendations are drawn from Indonesia’s experience and encompass: (1) risk data and analytics to inform the development of effective DRF policies; (2) existing financial instruments and policies for evaluating current gaps in risk financing framework; (3) institutional and legal readiness for adapting DRF into regulation and governance structures; (4) innovative financing mechanisms and challenges in fostering flexible and sustainable financial solutions for disaster resilience; and (5) perception and adaptability to transformative approaches in DRF to examine the feasibility and acceptance of novel approaches from global best practice. These components strengthen financial resilience by providing a structured framework for identifying gaps within DRF strategies, particularly in the Asia-Pacific region, where disaster risks continue to intensify. Tailoring DRF initiatives to each country’s specific needs ensures that developing nations are better equipped to manage financial shocks. Ultimately, these dimensions are crucial for enhancing the global financial safety net and fostering long-term sustainability in the face of increasing disaster risks.