In the Caribbean, low-income sections of the population will also be able to obtain insurance against weather-related disasters in future. The project “Climate Risk Adaptation and Insurance in the Caribbean”, which is supported by the Federal Environment Ministry (BMU) through its International Climate Initiative, is developing an innovative insurance product. Today, the first insurance policies were handed over to policy holders in Castries, the capital of the Caribbean island St. Lucia, to mark the market launch of the livelihood protection policy (LPP). These policies contribute to securing livelihoods by offering insurance against the negative impacts of climate change to broad sections of the population.
Hurricanes such as Tomas (2010) and Sandy (2012) had devastating impacts on the countries in the Caribbean, particularly on their agriculture and tourism sectors. This is why an effective insurance network is needed for especially vulnerable people to protect them against such threats to their livelihoods. Without this security they have to use up their savings or rely on help, which means their economic basis is weakened in the long term. “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 LPP premium is affordable to poorer sections of the population. Payment is triggered directly once a fixed limit value is exceeded (volume of rain or wind force), and payment reaches the policy holder 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 by the direct insurer EC Global, supported by Munich Re reinsurance services.
The Federal Environment Ministry will make over 2 million euros available for the ICI project “Climate Risk Adaptation and Insurance in the Caribbean”. The project will be carried out by the Munich Climate Insurance Initiative (MCII) together with partners Caribbean Catastrophe Risk Insurance Facility (CCRIF), MicroEnsure and Munich Re.