In the Caribbean, low-income sections of the population will also be able to obtain insurance against weather-related disasters in future. The Federal Environment Ministry (BMU) is supporting the project 'Climate Risk Adaptation and Insurance in the Caribbean' to protect smallholders and day labourers from losing their livelihoods through hurricanes or floods. Today, the first insurance policies were handed over to policy holders in Castries, the capital of the Caribbean island St. Lucia.
Hurricanes such as Tomas (2010) and Sandy (2012) had devastating impacts on these countries, particularly on their agriculture and tourism sectors. ‘More frequent and more extreme weather events can be expected as a result of climate change. This is why we need innovative solutions and insurance products to offer better protection to low-income sections of the population. This is especially important in regions and countries that are strongly affected by climate change,’ commented Federal Environment Minister Peter Altmaier.
The Livelihood Protection Policy (LPP) premium is also affordable to poorer sections of the population. Once a fixed limit value is exceeded (volume of rain or wind force), payment to the policy holder is triggered automatically within 10 to 14 days without them having to submit a claim. Additional services include text messages to clients to issue storm warnings through an early warning system or to inform them about payments being activated. The LPP will be offered locally by the direct insurer EC Global, supported by Munich Re reinsurance services.
The Federal Environment Ministry is providing over 2 million euros for the project ‘Climate Risk Adaptation and Insurance in the Caribbean’, which will be financed through funds of the International Climate Initiative. The project will be carried out by the Munich Climate Insurance Initiative (MCII) together with the partners Caribbean Catastrophe Risk Insurance Facility (CCRIF), MicroEnsure and Munich Re. The MCII, which was launched by Munich Re together with representatives of international financial institutions and scientific and non-governmental organisations, is housed at the UN University Institute for Environment and Human Security (UNU-EHS) and has been active in the United Nations climate change negotiation process since 2005.