A study into catastrophe losses in the Caribbean and their potential to increase due to the changing climate has been released by the Caribbean Catastrophe Risk Insurance Facility (CCRIF). The study has been undertaken by the CCRIF, Caribbean Risk Managers and regional partners, the Caribbean Community Climate Change Centre (5Cs), the UN Economic Commission for Latin America and the Caribbean and others with analytical support from McKinsey & Company and Swiss Re.
The study looking at the Economics of Climate Adaptation (ECA) in the Caribbean found that economic losses have the potential to rise by between 1% and 3% of Caribbean countries GDP by the year 2030. Currently economic losses in the Caribbean from wind, storm surge and inland flooding amount to as much as 6% of GDP in some countries so the potential rise is a big worry for the economic welfare of the region and a serious threat to development of the region.
Economic growth is said to the be the biggest reason for the increase in potential losses with wind being the major contributing hazard.
The study states that risk mitigation and insurance risk transfer initiatives could successfully avert as much as 90% of the potential for loss depending on the economic development of the country.