The paper is an initial attempt to consider the adaptation role of insurance and related risk sharing and risk transfer methods, in the context of a comprehensive approach to risk reduction and risk management. The paper concludes that if appropriately embedded among risk reduction measures and with the right incentives, insurance has important potential to reduce disaster risk and advance adaptation. In order to realize that potential, the paper also identifies some considerations for designing insurance programs that promote risk reduction. These include careful planning and close coordination in the implementation of insurance with disaster risk reduction; raising community risk awareness; investing in the gathering and dissemination of risk information; government regulation to ensure a longer term focus on risk reduction from insurers; and measures government regulation to ensure insurer solvency, licensing and insurance distribution.