The Caribbean Catastrophe Risk Insurance Facility (CCRIF) and Guardian General Insurance Limited have signed a Memorandum of Understanding to provide individuals and organizations such as cooperatives and NGOs with the ability to protect themselves and their members against financial loss resulting extreme weather conditions associated with wind and rain. . Guardian General Insurance Limited will provide access to the Livelihood Protection Policy (LPP) – a parametric micro-insurance product designed to help protect the livelihoods of low income people such as smallholder farmers, tourism workers , fishermen, market vendors, day laborers and small entrepreneurs, by offering prompt cash payments following extreme weather events (in particular, high winds and heavy rains).
CCRIF CEO Isaac Anthony welcomed Guardian General Insurance as a partner: “We see this partnership between CCRIF and Guardian General Insurance Limited as a win-win. We are encouraged that Guardian General has included the CRAIC project not as an add-on but as part of its overall business strategy and sees this collaboration as essential and a new challenge that would give them the opportunity to engage with new customers who can potentially buy other products they can offer”.
Aligning microinsurance with its overall business strategy, Guardian General has signaled its intention to invest time and resources in product development, regulatory approvals and product deployment, and ultimately to have a major interest in the success of the CRAIC project and deployment. out of the LPP across the Caribbean. Guardian demonstrates its commitment to the people who will benefit most from the product and sees scaling the LPP as a perfect fit with its existing business practices.
Guardian General chairman Dean Romany said: “Parametric products can help mitigate the immediate negative financial impact on an underserved portion of our population, such as small business owners or the self-employed in aquaculture, agribusiness, food and beverages, construction, hospitality and transportation. »
The LPP was developed as part of the Caribbean Climate Risk Adaptation and Insurance Project (CRAIC), which has been promoting climate risk microinsurance in the Caribbean since 2011. Implemented by Munich Climate Insurance Initiative (MCII), CCRIF SPC, ILO Impact Insurance, Munich Re and DHI, the project is supported by the International Climate Initiative of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety.
The CRAIC was the first project of its kind in the Caribbean region and was designed as a learning project, allowing the project consortium to capture lessons learned during the first two phases of implementation. The team learned many valuable lessons from the initial introduction of LPP in three initial pilot countries in 2013: Jamaica, Grenada and Saint Lucia. The LPP immediately demonstrated its value when policyholders – mostly small-scale farmers – in Saint Lucia received payouts on their policies after the “December rains” that hit the Eastern Caribbean that year (2013). As with CCRIF sovereign parametric policies, payments were made within 14 days. In the years that followed, policyholders received payouts after a number of events such as Hurricane Matthew, when 31 fishermen and farmers in St. Lucia received US$102,000.
The signing of the memorandum of understanding took place today during the launch of the transition phase of the project. The transition phase, which will be led by CCRIF, will use lessons learned from the first 10 years of the project to promote wider access to LPP in the five pilot countries Belize, Grenada, Jamaica, Saint Lucia and Trinidad and Tobago . The intention is to fully deploy the LPP in all CCRIF member countries at the end of the transition phase. According to CCRIF CEO Isaac Anthony. “What is essential for us at CCRIF is that Guardian General operates in nearly all of the 19 Caribbean member countries of CCRIF – and we see this as a first step towards scaling up and making this innovative product available. in the 19 Caribbean countries that CCRIF operates in. Together with Guardian General and their networks across the region, we will have multiple distribution channels for people to access LPP and also receive payments.
Soenke Kreft, Executive Director of MCII, was excited about the next phase: “This moment represents a new era in the relationship between the Munich Climate Insurance Initiative and the CCRIF SPC. At MCII, we are delighted that CCRIF SPC is stepping into this new role, expanding access to microinsurance products through leadership and partnerships with Caribbean insurers, governments and stakeholders.
During the transition phase, the project consortium will work with Guardian General Insurance Limited and its teams in the five pilot countries to obtain the necessary approvals and leverage lessons learned to expand access to a refined livelihoods protection policy . The team will also work closely with governments to align microinsurance with social protection strategies as part of an overall strategy to close the protection gap. The project will work with policy makers, regulators and relevant ministries to create an enabling environment for the growth of climate risk insurance and to integrate it into local and national disaster risk reduction strategies and/or of sustainable development. These activities aim to further strengthen the social and economic resilience of vulnerable populations, increase adaptive capacity that reduces poverty in line with the desire to leave no one behind and the Sustainable Development Goals.
