Regional institutions, adaptation, and insurance: expanding coverage for medium-level weather extremes in vulnerable countries using risk reduction and innovative insurance solutions

The project developed solutions for managing weather-related risks – what are known as extreme weather events, such as hurricanes and droughts. It is also supported the development and launch of public safety networks and public-private insurance schemes for vulnerable population groups. To this end, it brought 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 designed and launched products that combined 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 was exceeded, policyholders automatically received payment; complex claim procedures were not necessary.

Project data

Countries: Belize, Grenada, Guyana, Jamaica, Saint Lucia
IKI funding: 1,980,177.12 €
Duration: 03/2011 till 06/2015
Status: completed
Implementing organisation: Munich Climate Insurance Initiative (MCII)
Political Partner: Caribbean Catastrophe Risk Insurance Facility (CCRIF) - Grand Cayman
Implementing Partner: Caribbean Catastrophe Risk Insurance Facility (CCRIF) - Grand Cayman

MicroEnsure

Münchener Rückversicherungs-Gesellschaft (Munich Re) - Germany
Online: http://www.climate-insurance.org/home/

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State of implementation/results

Project completed
Weather index insurance policies 'Livelihood Protection Policy' and 'Loan Portfolio Cover' have been developed and approved by the relevant authorities in St. Lucia, Grenada and Jamaica; since June 2013, policies have been available for purchase by the low-income population and microcredit institutions respectively. In St. Lucia, an insurance policy was introduced specifically for microcredit institutions (Loan Portfolio Cover), insuring them against weather-related defaults of their microcredit borrowers; enabled microloans by microcredit institutions for areas previously considered too risky - due to weather extremes
Training and capacity development activities on the application of weather index insurance (especially for local insurers) took place
MunichRe acted as international reinsurer for the respective national primary insurers
In December 2013, an extreme weather event occurred in St. Lucia. In December 2013, an extreme weather event occurred on St. Lucia, triggering the first successful payouts to the insured under the 'Livelihood Protection Policy'.

Latest Update:
03/2025