The Caribbean islands are particularly prone to the risks and potential impact of climate change. Their financial status, stage of development of their economies and geography leave them particularly vulnerable to both the perils of sea level rise and increased frequency of natural disasters.
The World Bank helped to form the Caribbean Catastrophe Risk Insurance Facility to help alleviate the problem by providing a parametric insurance facility which could protect the economies of the Caribbean nations and provide a financial backstop which would allow them to quickly recover from disasters. The CCRIF provides a valuable service to the region, despite the shortcomings that exist in this type of cover (more on that here).
The CCRIF has published a paper which details their thinking about the region and the difficulties it faces due to climate change and how it can be addressed by risk management. It’s worth reading and you can find it here. It provides a good overview of the issues facing the region and what the CCRIF are doing to address it.
It would be interesting to see other insurance companies introduce micro-insurance products to the Caribbean. The local busines people and farming communities would surely benefit from a similar approach to that taken in India.
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