Natural hazards in the Caribbean, such as hurricanes, earthquakes and landslides, regularly cause damage across all sectors of society and the economy. While there is little that can be done to stop or alter the progress of hazardous events, much can be done to minimize their effects on homes, communities and economies in the region. As holders of mortgages and insurance portfolios in this hazard-prone region, national and regional banks and insurance companies have a vested interest in promoting vulnerability reduction. While the success of vulnerability reduction measures such as building codes depends, to a large degree, on proper implementation and enforcement by government, financial and insurance companies can play a significant role in promoting hazard-resistant building practices through financial incentives, educational information and promotion of minimum building standards.
Catastrophe insurance focuses foremost on spreading or distributing losses, rather than on reducing losses. It is in the industry's interest, however, to promote vulnerability reduction in its market, and consequently the potential loss, as this would lead to lower premium rates (because the risk is lower) and a larger overall market. The insurance industry can promote loss reduction through incentives to policyholders for taking loss reduction measures, and by providing support for public sector and community-based disaster prevention. In the retail lending sector, it is in a bank's best interest to ensure that the buildings built or purchased with their funds will survive through the life of the mortgage.
As both the insurance and banking sectors play significant roles in building and development, the PGDM organized a series of roundtables with representatives of the banking and insurance industries in Antigua/Barbuda and St. Kitts/Nevis regarding private-sector approaches to supporting more resilient building practices. This roundtable series builds off hazard mitigation initiatives in the insurance sector that were begun under the Caribbean Disaster Mitigation Project.
The first of the two roundtables was held in Antigua on 18 January 2001; the second meeting was held in St. Kitts on 4 April 2001. All insurance companies and retail banking establishments currently active in Antigua/Barbuda and St. Kitts/Nevis were invited to participate and both meetings included participants from both countries. There were 31 representatives from the banking and insurance sectors at the first roundtable and 22 at the second.
Four primary approaches and mechanisms for more fully integrating hazard mitigation into the operations of these sectors were identified and discussed in detail:
The results of these discussions are available in the final report for the roundtable series. On additional outcome of this roundtable series was that the professional organizations for both the banking and insurance sectors in Antigua/Barbuda and the banking sector in St. Kitts/Nevis had reorganized themselves.
|USAID/OAS Post-Georges Disaster Mitigation: http://www.oas.org/pgdm||
Page last updated on 17 Sep 2001