Page 21 - DDME "The Disaster Forum"

The proposal for CARICOM States is a parametric micro-insurance solu@on for farmers, fisher-folks and small business operators (micro-enterprises) and low income households (households with incomes at or below designated poverty lines for individual states). This solu@on will involve parametric triggers for cyclones (tropical storms and hurricanes), floods, drought and sea swells that can wreak havoc on traps and other resources of low capitalized near-shore fishers.
CONCLUSION
The need for risk transfer solu@ons to facilitate livelihood con@nuity and sustainability among low income households in CARICOM States is underscored. Low levels of income exclude these households from access to tradi@onal insurance mechanisms, but micro-insurance solu@ons provide an op@on for reduc@on of disaster risk in a sustainable way among the poor of CARICOM States. The model presented in this paper advocates flexibility in provision of index-based insurance coverage to key low-income sectors as a means of promo@ng responsibility for capaci@es to bounce back from the impact of hazards, as well as to ac@vely mi@gate disaster risk and enhance resilience. The model is not prescrip@ve, but instead, provides the basic framework than can effec@vely inform development of micro-insurance solu@ons in individual States. Appropriateness and viability of solu@ons must be informed by the outcome of rigorous feasibility studies in individual CARICOM States.
REFERENCES
Abels, H. & T. Bullens (2005), Micro-insurance. Micro-insurance Associa@on, Netherlands (MIAN).
Arnold, M. (2008) The Role Risk Transfer and Insurance in Disaster Risk Reduc@on and Climate Change. Commission on Climate Change and Development
GFDRR (2011) Disaster Risk Financing and Insurance Case Study: Caribbean Catastrophic Risk Insurance Facility (CCRIF).
Mechler, R. et al (2006) Micro-insurance for Natural Disaster Risk in Developing Countries: Benefits, Limita@ons Viability. ProVen@on/IIASA Study.
Spence, B., (2016) Micro-insurance in Disaster Risk Reduc@on: A strategy for Enhancing Domes@c Food Security in CARICOM countries, Climate Change and Food Security in Africa and the Caribbean, Elizabeth Thomas Hope (ed). Taylor Francis Publishers
Spence, B. (2013), Final Feasibility Study Report on Selected Micro-insurance for Disaster Risk Reduc@on in the Virgin Islands (UK).
This
to the possibility that the established trigger might be insufficiently correlated with losses experience, in which case there might be no payout. Addi@onally, the trigger-contracted payout might not cover actual loss for a par@cular event, essen@ally cons@tu@ng under-insurance. However, the benefits of this type of solu@on has to be weighed cumula@vely and not in rela@on to single events.
type of insurance interven@on is transparent since payout is fixed in advance. The main poten@al drawback relates
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