This policy brief discusses two types of disaster risk financing (DRF) tools that can act as policy options for disaster risk reduction (DRR) in Asia and the Pacific. As the economies in Asia and the Pacific are exposed to disaster risks, one strategy to mitigate the economic losses and strengthen financial resilience to disasters is developing disaster risk financing. There are two policy options in implementing disaster risk financing: public sector and private sector disaster risk financing tools. Each option has challenges that need to be addressed for them to be effectively implemented.The document concludes that two possible strategies could be pursued for overcoming the implementation challenges of disaster risk financing. These include the establishment of institutional arrangements for a combined public– private response to disaster risk financing and the development of a state-sponsored disaster insurance scheme.