<p>The catastrophic events are characterized by “low frequency and high severity”. These events, marked by factors beyond human control, necessitate effective disaster risk management (DRM) strategies. This paper defines two primary DRM strategies: “adaptation” and “mitigation”. Adaptation involves insurance to hedge the losses due to natural disasters, while mitigation aims to reduce their frequency by an “effort”. We find a closed-form solution to the problem of a representative consumer who holds a production technology (firm) and who optimizes both the intertemporal consumption and the mix between an adaptation and a mitigation strategy. Catastrophic events are modeled as Poisson jumps, allowing for partial control over their occurrence. Simulations, based on real-world data from various countries, demonstrate the country-specific nature of optimal disaster risk management policies. Comprehensive DRM policies are shown to reduce the volatility of the economic growth rate, although they may lower the average level of the growth rate because of effort expenses. Simulations allow us to also conclude that different countries must optimally react differently to catastrophes, which means that a one-for-all policy does not seem to be optimal.</p>