Latin America & the Caribbean

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The impacts of climate change are increasingly severe and the need for action is more urgent than ever. Caribbean islands are among the world’s most vulnerable, with storm frequency and intensity, flooding, wind damage and sea level rise all predicted to worsen, increasing threats to hospitals, power plants, freshwater sources, roads, houses and schools. Island communities must work together to prepare for disasters caused by natural phenomenon and minimize the impacts they will endure. Evidence shows that key ecosystems, like coral reefs and mangroves, can help reduce these risks while...
The overall aim of the project is to increase resilience to extreme weather events by devising on an integrated climate risk management approach that includes insurance. The ACRI+ project worked to collect the experiences and best practices from different organizations across the globe and promote these findings at international conferences and workshops, as well as on their online database “Climate Insurance”.
This roadmap is developed from work undertaken on ICRM through the “Advancing Climate Risk Insurance plus” (ACRI+) proejct implemented by the Deutsche Gesellschaft für International Zusammenarbeit (GIZ) GmbH and the Munich Climate Insurance Initiative (MCII). In Barbados, the ACRI+ project is working with stakeholders to improve the resilience of existing and future renewable energy generation, transmission and distribution infrastructure to climate and disaster risks.
ACRI+’s objective is to enhance local climate and disaster risk practices, therewith integrating residual risk into the disaster risk management cycle of prevention, preparation, response, and recover practices. ACRI+ operates in three countries with varying climate risks. In Barbados, ACRI+ supports local authorities with their envisioned renewable energy transition and aims to improve the resilience of existing and future renewable energy generation, transmission and distribution infrastructure towards extreme weather events. The Barbados Renewable Energy Association (BREA) is the local...
The overall aim of the project is to improve the affordability of high-quality sovereign catastrophe risk transfer associated with earthquakes and climate-related events of CCRIF participating countries.
Government institutions provide support to develop the market for innovative extreme weather insurance and adopt the regulatory and institutional frameworks so that these kinds of insurance products can be promoted. Challenges related to this objective are: Lack of an effective regulatory environment for establishing products as parametric index insurance exists in the region; the current Insurance Acts in the target countries do not address weather-based index insurance. Previous market failures in the Caribbean have resulted in extra vigilance and caution being exercised by the regulatory...
Insurance – though no panacea for climate change-related extreme weather events – can serve as a measure for adaptation of vulnerable populations to climate change. People that are especially vulnerable to climate change predominantly rely on traditional coping mechanisms, such as the use of savings. However, these traditional measures are often insufficient and can lead to a negative impact on their overall resilience in the long term. Insurance could serve as one measure to cover losses occurring from an extreme weather event but the vulnerable population are often not familiar with...
Vulnerability to climate change can lead low-income communities deeper into poverty in the long run. Improving their ability to respond to, and cope with climate change-related shocks can increase social resilience and decrease vulnerability. Therefore, by establishing a mobile phone text message that alerts insurance policyholders to approaching extreme weather events, the project has sought to improve the risk management capacities of target communities. Challenges related to this objective are: Close cooperation is required between the local insurers and national disaster management...
Sustainable insurance solutions for agricultural and climate risk requires a joint effort of both the public and the private sector: the partners need to cooperate and commit to facilitating a market development process. Private insurance companies design appropriate insurance products, establish administrative processes and carry the risk. They invest financial and human resources and commit themselves to the agricultural and climate risk insurance markets. Government support that goes beyond creating an enabling regulatory environment can be critical to the sustainability of such systems...
The Peruvian agricultural sector, which is fundamentally important to the national economy, is particularly affected by natural hazards caused by climate change. Insurance as a possible risk management strategy has received only little attention so far (both by clients and by the industry) due to the following reasons. Limited experience with financial products including insurance. Overall lack of understanding of and interest in (climate) insurance among most stakeholders. Widespread lack of trust in insurance companies amongst the population. Lack of investigation and research with respect...
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