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The average annual loss from hurricanes in Sint Maarten is estimated to be US$4.1 million as estimated by the 2019 Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC). For decades, the beautiful Caribbean Island of Sint Maarten has been repeatedly hit by intense tropical storms and hurricanes. A single storm has the potential to directly impact the entire population and economy, as Hurricane Irma did in 2017. Irma, a Category 5 hurricane, affected 90 percent of...
The Caribbean, renowned for its marine ecosystems and tourism, depends heavily on tourism for its economic growth and financial stability, making it crucial to protect its people, economies, ecosystems, and biodiversity from the effects of natural disasters. Recent major floods, storms, and hurricanes have caused significant losses, particularly in industries reliant on the environment, such as tourism. In the Eastern Caribbean, tourism accounts for 50% of regional GDP and about 40% of...
Alongside increased focus on climate change, the discussion has widened to consider nature and biodiversity. It is becoming increasingly apparent that there is both a direct and indirect financial threat from nature degradation and reduced biodiversity. This is still an evolving area, where we expect the COP 15 in Q3 2022 to set the agenda for the next few years. The G20 Sustainable Finance Roadmap (G20 SFWG, 2021) highlighted the need to integrate nature and biodiversity in future work on...
Disasters by their nature present a shock but nonetheless their occurrence can be estimated, as has been done by the insurance industry for years. That is to say the consequences are not so unexpected. However, when trying to account for the implicit contingent liabilities, such as those generated by natural disasters, the impact of the shocks are often not quantified in the government balance sheet. Yet, when they materialize, they place pressure on government finances that may raise interest...
Simply put, we save money as a precaution because we do not know what the future holds. Savings help governments fulfill their fundamental role, which is to ensure the well-being of their citizens. When natural disasters or crises strike, early action saves lives. COVID-19, which has wreaked havoc on economies and taken the lives of people around the world, has proved this yet again. Statistically speaking, COVID-19 has shown that timely action helps flatten the curve (see figure 1). Figure 1...