ON THE LEFT: Greater demand for disaster insurance
Should Barbados and the region be more focused on disaster risk insurance?
IN 2015-2016 we undertook a wide range of projects aimed at fulfilling our mission and responding to the needs of members. This year Caribbean Catastrophe Risk Insurance Facility (CCRIF) members purchased a total of 43 policies – seven more than the previous fiscal year.
An additional four members purchased excess rainfall policy this year, bringing the total number of polices purchased under this product to 12.
This signals to us that countries are mindful of the importance of including ex-ante risk financing strategies as part of their overall disaster risk management policy framework and the linkages of these with their fiscal and debt sustainability strategies.
We continue to recognise many of the macroeconomic challenges that our members face and we are always looking for avenues to reduce premiums and offer preferable options for our members.
For the 2015/16 policy year, CCRIF offered an extremely attractive premium package, which included significant discounts for hurricane, earthquake and excess rainfall policies.
This rebate was a way of providing a benefit to member countries based on CCRIF’s positive financial performance.
Arguably, the strongest rationale for pre-disaster financing is that developing countries have a higher propensity for post-disaster resource deficits.
Governments of developing countries typically must divert from their budgets to finance post-disaster expenses, and rely on new loans and donations from the international community.
Historically, these sources of post-disaster finance too frequently prove inadequate to fund a timely humanitarian response.
As such, CCRIF continues to respond to the needs of its members to develop new and innovative parametric insurance products.
Recent stakeholder assessments of CCRIF indicated that member governments have the desire for CCRIF to develop insurance products for the agriculture sector – addressing not only excess rainfall and wind damage but also drought conditions.
This year, we began the development of a drought product for both Central American and Caribbean countries.
We have also begun discussions on the development of a product for the agriculture sector.
Earlier this year as well, CCRIF engaged in an initiative of the United States Department of State, World Bank, United Nations Food and Agriculture Organisation and others to develop parametric insurance products to be marketed in the Caribbean to promote the resilience of the fisheries sector against increasing climate change-related disaster risks.
We also re-engaged in discussions with the Munich Climate Insurance Initiative and other partners to expand the access to micro-insurance products by Caribbean people who are severely impacted by extreme weather events.
As we look ahead to the 2016/17 policy year and beyond, we will commit to continuous innovation as well as the development of other sustainable products, services and tools to meet the needs of members in an effort to enhance their disaster risk response and management capabilities.
We also will place particular emphasis on the importance of expanding coverage among members as well as working with members to define adequate coverage levels.
We remain committed to encouraging new membership from countries in both the Caribbean and Central America.
We will continue to approach the donor community to access higher levels of funding that will go towards supporting our current members as well as prospective new members.
Isaac Anthony is chief executive officer of The Caribbean Catastrophe Risk Insurance Facility.