Small-scale fishers get lifeline with new insurance program
Small-scale fishers in the Caribbean, still reeling from the deadly and damaging hurricanes that swept through the region earlier this fall, are getting a little help from a newly created insurance program.
The former Caribbean Catastrophe Risk Insurance Facility (now known as CCRIF-SPC) and the World Bank have joined forces to provide insurance coverage for small-scale fishers in the Caribbean, using a new facility bearing the acronym COAST.
Hurricanes Irma and Maria, which pummelled the Caribbean in September, underscored the need for such insurance protection, with some of CCRIF-SPC's member states among the worst affected, including Dominica, Turks and Caicos, and Antigua and Barbuda.
CCRIF was established in 2007 as a regional catastrophe fund for Caribbean governments to limit the financial impact of devastating hurricanes and earthquakes. It does so by quickly providing financial liquidity when a policy is triggered, the organization's website notes. To date, it has paid out more than USD 120 million (EUR 103 million) to member governments.
Randall Brummett, senior fisheries specialist in the Environment and Natural Resources Global Practice at the World Bank, told SeafoodSource via email that the objective of COAST is to create a platform for “innovative insurance financing” that encourages small-island governments to support coastal management and reef restoration so as to build climate resilience.
“The Caribbean Ocean and Aquaculture Sustainability Facility (COAST) proposes to promote the resilience of the small-scale fisheries sector in the Caribbean against increasing climate-change related disaster risk,” Brummett said.
PROFISH, the World Bank's Global Program on Fisheries, “is helping to set up this COAST facility and managing the design of the insurance product which will ultimately create more resilient coastal communities and habitats.”
Currently, only about 10 percent of Barbuda's fishermen have insurance coverage, and the situation is not much better throughout the rest of the Caribbean.
CCRIF-SPC CEO Isaac Anthony told Seafoodsource that COAST would focus primarily on insurance coverage for assets including “loss of or damage to fishing vessels, equipment and gear and aquaculture installations as a result of natural or man-made hazards, with these expecting to increase with climate change.”
He added that the ability of an insurance product “to provide 'business interruption' insurance to individuals is very relevant for the fisheries sector, where current life and asset insurance is lacking or has insufficient participation from fisherfolk.”
Other risks, not covered by COAST, which fishers may face from natural disasters include personal injury, death, fluctuations in market prices and interest rates, and loss of catches.
Anthony said COAST will also provide insurance cover for governments “purchasing sovereign fisheries insurance [to] provide financial security for the fisheries sector. For example, a payout could be used for overarching interventions after a severe weather event, such as clearing and rehabilitating fishing beaches to facilitate fishers to resume their work or for activities such as building facilities, installing jetties, and rehabilitating fishing districts and landing sites.”
Other proposed beneficiaries of COAST are commercial fishers, fish farmers, seafood processors, fish vendors, boat owners, fishing equipment businesses, and financial institutions that lend to fishers.
PROFISH has provided USD 5 million (EUR 4.3 million) as start-up investment capital for the insurance facility. Brummett said the World Bank was hoping to see other donors step forward to increase the facility's funds.
At the same time, there are proposals for determining the premiums to charge policyholders in COAST, Anthony said. Premiums for sovereign policies could be financed partially from levies on commercial fisheries sectors and from a portion of fishers’ licensing fees, he said, while premiums for individual policies could be reduced if governments allowed the purchase of the insurance using pre-tax income.
Governments can apply for coverage under the COAST facility by indicating to CCRIF their interest in purchasing the product. The facility will then undertake discussions with the government regarding policy conditions and premiums, Anthony said.
At the individual level, persons should approach designated country organizations, including insurance companies or financial institutions, to purchase a policy.
Brummett said COAST focuses on three complementary elements: a carefully designed and marketable insurance product at an affordable premium; the requisite planning effort on food security and disaster risk-management at country level; and making technical assistance widely available.
“Healthy ecosystems bounce back faster than more vulnerable systems after major weather events and we are working with regional and national fisheries authorities to support local efforts to improve the sustainability status of Caribbean fisheries,” Brummett said.
Thus, COAST will be working “with cooperatives to assist them with building capacity of fishers to improve and define best practices in fishing, as well as with governments to develop and implement climate-smart food security strategies,” Anthony expained via email to SeafoodSource.
As well as carrying out the feasibility analysis for the COAST insurance products, CCRIF-SPC also has the responsibility of “marketing the insurance product(s) to governments and fishers in the Caribbean, as well as organizations and institutions engaged in the fisheries sector,” Anthony said.