Germany supports the development of innovative insurance solution in the CaribbeanEnlarge image
On 29 May, 2013, the Chargé d’Affaires of the German Embassy, Mr. Ullrich Kinne, inaugurated the project “Climate risk adaptation and insurance in the Caribbean“ in Castries/Saint Lucia in the presence of Senator the Hon. Dr. James Fletcher, Minister for Public Service, Sustainable Development, Energy, Science and Technology and other government officials.
Funded by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) International Climate Initiative, the Climate Risk Adaptation and Insurance in the Caribbean project is being implemented by by the Munich Climate Insurance Initiative (MCII), hosted at the United Nations University Institute for Environment and Human Security (UNU-EHS), in partnership with the Caribbean Catastrophe Risk Insurance Facility (CCRIF), MicroEnsure and Munich Re. Ecglobal Insurance in Saint Lucia has been the first insurance company in the Caribbean to offer insurance policies in the framework of this new project.
Developing countries located in disaster-prone regions such as the Caribbean are particularly hard hit by the consequences of global climate change. As extreme weather events increase not just in frequency but also in intensity, vulnerable populations are made even more vulnerable by the increased risk changing weather conditions place on their lives and livelihood.
The Climate Risk Adaptation and Insurance in the Caribbean project addresses climate change, adaptation and vulnerability by promoting climate risk insurance as an instrument to manage, and transfer risk. Under the aegis of the Climate Risk Adaptation and Insurance in the Caribbean project, two parametric weather-index based risk insurance products have been developed aimed at low-income individuals, and financial institutions for implementation in Jamaica, St Lucia, Belize, Grenada, and Guyana. Based on the experience gathered in these countries, the project is bound to be extended to the entire Caribbean.
Protecting the livelihoods of low-income, vulnerable groups by improving their ability to cope with weather-related risks can make a positive contribution to socio-economic development in the Caribbean. Targeted at individuals, the Livelihood Protection Policy helps protect the income flows of low-income people by improving their ability to absorb extreme weather related shocks and mitigate risks, reducing poverty and vulnerability in the long term.
The credit portfolios of financial institutions are exposed to extreme weather risks and if left unmanaged, it can significantly hinder financial sector growth in the Caribbean. In view of this, the Loan Portfolio Cover has been designed to strengthen the equity base of financial institutions in the face of weather related shocks, so that they do not have to resort to reducing access to credit, curbing economic activity which would consequently impede economic growth and poverty reduction.
To learn more, please visit www.climate-insurance.org
Watch a Deutsche Welle movie that portaits the first experiences with this innovative insurance in St. Lucia.