Caribbean insurance a model for other regions
As small island developing states head into the last set of discussions on loss and damage associated with the effects of climate change, the head of an international body says the Caribbean Catastrophe Risk Insurance Facility can be a model for other regions.
Executive Secretary of the United Nations Framework Convention on Climate Change Christiana Figueres said this morning at the opening of a Small Island Developing States meeting ahead of DOHA that the Caribbean was the only region to have successfully implemented an insurance facility to help mitigate the impact of loss and damage due to disasters as a result of climate change.
The two day expert meeting being held at the Hilton Barbados is to come up with a range of approaches to address the loss and damage associated with the adverse effects of climate change, including impacts related to extreme weather events and slow onset event.
Figueres said it was the last in a series of four expert meetings, but the first to deal specifically with SIDS, since the vulnerable economies with high dependence on foreign resources meant countries themselves had primitive resources, high exposure to natural hazards and extreme events that were intensifying in strength and frequency.
One of the greatest challenges she said was the fact that insurance coverage to aid in such cases were becoming unavailable or otherwise unaffordable.
“The Caribbean is the only region in the world that has this regional insurance system. The CCRIF is quite unique and actually is looked upon by other countries as a possible lessons learned to see what can be extrapolated.
“What is being thought through in this meeting and needs to go forward to DOHA is what insurance mechanisms can be set up at the global level to give the first level of insurance.”
CCRIF, which functions like a mutual insurance company, is controlled by participating Caribbean governments, and allows those partners to purchase coverage “akin to a business interruption insurance that will provide them with immediate liquidity in case of a major hurricane or earthquake”. The structure allows those governments to tailor the coverage to their needs at significantly lower costs than available on individual financial markets.
Addressing the meeting as well, Minister of the Environment, Dr. Denis Lowe told the delegates from countries including Kiribati, Fiji, Qatar, Canada, Dominican Republic and others, that the vulnerability of SIDS has worsened over the last decade.
“With our limited economic bases, for SIDS, responding to climate-related hazards in their aftermath generally requires the urgent readjustment of national development priorities and budgets to the extent that it may set back our sustainable development pursuit by years, and quite possibly decades.
“This is the principal reason why the deliberations that you will be undertaking here is of utmost importance to Barbados and the 44 member AOSIS fraternity,” he noted. (LB)