Projects - International Climate Initiative (IKI)

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As of: May 2015

Climate risk adaptation and insurance in the Caribbean


Objective and activities

The project is developing solutions for managing weather-related risks – what are known as extreme weather events, such as hurricanes and droughts. It is also supporting the development and launch of public safety networks and public-private insurance schemes for vulnerable population groups. To this end, it is bringing together three key stakeholders: the Caribbean Catastrophe Risk Insurance Facility (CCRIF) as a regional insurance pool, MicroEnsure, a pioneer in the provision of local insurance solutions, and the international reinsurer Munich Re. The project partners are designing and launching products that combine risk reduction and climate risk insurance in order to protect low-income population groups in the Caribbean, such as farmers and smallholders, against weather-related damage. If a specified threshold, such as amount of rainfall or wind force is exceeded, policyholders automatically receive payment; complex claim procedures are not necessary.

State of implementation/results

•The weather index insurance policies Livelihood Protection Policy and Loan Portfolio Cover have been developed and approved by the responsible authorities in Grenada, Jamaica and Saint Lucia; as of June 2013, low-income population groups and microcredit institutes can purchase policies
•In Saint Lucia, insurance policies have been specially developed for microcredit institutions (Loan Portfolio Cover) to insure them against microcredit borrowers who default due to weather conditions; this enables microcredit institutions to lend microcredits in areas which previously were seen as too risky due to weather extremes
•Training and capacity development activities on applying weather index insurance policies (in particular for local insurers) are conducted
• MunichRe acts as international reinsurer for the respective national primary insurers
• In December 2013 an extreme weather event took place in Saint Lucia triggering the first successful payments to holders of the Livelihood Protection Policy

Project data

Country:
Central and South America, Caribbean supraregional: Belize, Grenada, Guyana, Jamaica, Saint Lucia

Partner institution:

Caribbean Catastrophe Risk Insurance Facility (CCRIF), MicroEnsure, Munich Re


Implementing organisation:

Munich Climate Insurance Initiative (MCII)


BMUB grant:
€ 2,035,530

Duration:
03/2011 till 09/2014

Website:
Website



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