GRAND CAYMAN, Cayman Islands (CMC) — The Caribbean Catastrophe Risk Insurance Facility (CCRIF) Wednesday signed a memorandum of understanding (MOU) with the Trinidad-based Guardian General Insurance Limited (GGIL) offering individuals and organisations protection against economic losses that result from extreme weather associated with wind and rain.

“We see this partnership between CCRIF and Guardian General Insurance Limited as a win-win. We are encouraged that Guardian General has included the Climate Risk Adaptation and Insurance in the Caribbean (CRAIC) project as part of its overall business strategy,” said CCRIF chief executive officer, Isaac Anthony.

“What is key for us at CCRIF, is that Guardian General operates in all of the five pilot countries, and we see this as a first step towards scaling up and making this innovative product available to the various target groups.  With Guardian General and its networks across the pilot countries, we will have multiple distribution channels for persons to access the Livelihood Protection Policy (LPP),” he added.

GGIL, which operates in 21 Caribbean countries and describes itself as “the largest indigenous property and casualty insurance company in the region” said that it will provide access to the LLP, a parametric micro-insurance product designed to help protect the livelihoods of low-income and vulnerable persons such as small farmers, seasonal tourism workers, fishers, market and food vendors, musicians, day labourers, and small entrepreneurs.

It said under the programme these people will be provided with quick cash payouts following extreme weather events, specifically, high winds and heavy rainfall.

The LPP was developed under the CRAIC Project, which has been promoting micro-insurance for climate risk in the Caribbean since 2011. CRAIC is implemented by the Munich Climate Insurance Initiative (MCII), CCRIF and ILO Impact Insurance, with support from the International Climate Initiative of the German Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety.

It is being implemented in five pilot countries, namely Belize, Grenada, Jamaica, St Lucia and Trinidad and Tobago.

“Parametric products can be instrumental in alleviating the immediate negative financial impact on an underserved portion of our population, such as SME owners or self-employed individuals in the aquaculture, agribusiness, food & beverage, construction, hospitality, and transportation sectors,” said Guardian General’s President, Dean Romany.

CRAIC is 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 implementation phases. From the early days of implementation, the project has demonstrated value to its policyholders.

For example, in 2013, following the introduction of the LPP in St Lucia, policyholders received the first payouts on their policies after the “December rains” that affected the island. As with CCRIF’s sovereign parametric policies, payouts were made within 14 days.

The MOU signing took place at the launch of the transition phase of the project and the CCRIF said that that phase will use the lessons learned from the first 10 years of the project to promote wider access to the LPP within the five pilot countries.