By Elesha George
Hurricane insurance is just within reach for residents in Antigua and Barbuda, thanks to months of ground work put in by technicians in the Commonwealth of Dominica.
Dominica became the first OECS country to offer individual parametric hurricane and storm insurance through its Climate Resilience Execution Agency for Dominica (CREAD).
The Flexible Hurricane Protection (FHP) pilot project was launched one month before the official start of the 2021 Atlantic Hurricane Season.
Unlike traditional insurance, which provides protection for specific assets like a home or a car, FHP provides protection against the occurrence of the damaging winds caused by tropical storms and hurricanes.
While regional governments utilise policies like the Caribbean Catastrophe Risk Insurance Facility (CRIF), CREAD operates on a micro level, allowing individuals direct control over the funds.
In mid-April, the various policies were made available to residents who are members of the Dominica Co-operative Societies League Ltd. It was piloted through the Grand Bay Co-operative Credit Union and the West Coast Co-operative Credit Union which are located in predominantly agricultural communities.
General Manager of the League, Phoenix Belfied said it is just a matter of scaling the programme to fit the different regional territories.
The most time-consuming part of the programme, Belfield noted, was taking the necessary steps to become compliant with regulators.
However, now that all the ground work has been established, he forecasts that the solution can take just three to six months to scale in other OECS countries.
The policy allows an individual to cover their property against tropical storms all the way through Category 5 hurricanes and issues payment on a tiered structure based on storm strength.
It is seen as a game changer for farmers, fishermen and small business owners who experience damage because of wind intensity.
The FHP measures wind speed since that is what storms have historically been measured against.
Economic Development Director at CREAD, Brent Barnette said to date, the vast majority of people who signed up for the insurance wanted to use it for agricultural holdings, since insurance for agriculture is not available in Dominica.
During a virtual meeting on Tuesday, he noted that for a place like Dominica, where rainfall is often the more severe issue, it leaves a gap regarding payout of damage due to rainfall.
However, the programme is so flexible that there is no restriction on how you can use proceeds from a payout. Payouts are predetermined based on the policy options selected and individuals can get automatic direct payouts within 15 days.
The risk transfer solution was provided by London-based Global Parametrics, an industry leader in developing risk transfer products that provide parametric insurance to their clients around the world. GP is also providing the capital to finance the policies through its Natural Disaster Fund.