CCRIF and WFP link parametric insurance to social protection in Dominica
The CCRIF SPC (formerly known as the Caribbean Catastrophic Risk Insurance Facility) has partnered with the United Nations World Food Program (WFP) to link its parametric disaster insurance payouts to social protection systems in Dominica.
Treated as a pilot project, the idea is to link the deployment of social protection financing to the parametric disaster insurance payouts that CCRIF provides, in order to harmonize the disbursement of capital after a disaster.
UN WFP and the Government of the Commonwealth of Dominica have signed an agreement to link social protection systems to CCRIF payouts, to more easily provide assistance to the most vulnerable after a climate shock.
“Through this pilot project, WFP has strengthened the Government of Dominica’s access to disaster risk financing,” said Denise Edwards, Dominica’s Acting Finance Secretary. “We welcome this initiative as we work to build the financial resilience of vulnerable people in the face of disasters and dangerous impacts.”
WFP is providing funding of US$300,000 over two years, which will be used to pay Dominica’s premium for its CCRIF SPC Parametric Tropical Cyclone Insurance Policy for policy years 2021/22 and 2022/ 23.
With this financial support, a portion of future parametric insurance payments will flow through national social protection programs following the occurrence of a tropical cyclone or hurricane.
As a result, rapid cash payments could be made directly to those affected, through which it is hoped that recovery can be accelerated and capital will be provided to those most in need after disasters.
“This assistance will also enable the government to meet its parametric tropical cyclone insurance coverage. We express our deepest gratitude to WFP as we continue to partner and collectively contribute to Dominica’s Sustainable Development Goals,” said Edwards.
Isaac Anthony, Managing Director of CCRIF SPC, added: “We are delighted to see the links between CCRIF SPC payouts and social protection in action. We consider this WFP initiative to be innovative, and we are happy to be part of it, to enable rapid and effective assistance to those most in need following a natural disaster, in accordance with the principle of leaving no one behind. next to.
Importantly, Anthony said that by disbursing part of the payments through social protection systems, it facilitates the vertical and horizontal expansion of the system, while demonstrating that parametric triggers can also make protection systems more responsive to shocks.
Regis Chapman, Country Director and WFP Caribbean Country Office Representative, also said, “WFP is honored to be a chosen partner in this bold and innovative step taken by the Government of Dominica. This effort will enhance national disaster risk preparedness and management efforts and put Dominicans at the center of response and recovery efforts in times of crisis.
Initiatives that create a direct link between disaster risk financing and social protection are increasingly seen around the world, as countries seek to direct capital and payments to those most in need, and to make disbursements more responsive to the actual climate shocks that occur.
Over time, we may see more social protection provided in line with insurance, triggered by parameters based on the occurrence of specific disasters or the declaration of a state of emergency.