Could microinsurance reduce 'ocean risk' in the Caribbean?

Speaking at the recently held Ocean Risk Summit in Bermuda, British Virgin Islands deputy premier Kedrick Pickering declared so-called ocean risk an urgent priority, citing the economic devastation suffered by the islands with last year's Hurricane Irma and the pressing need to address rising risks associated with climate change.

One project tackling the problem, backed by the Munich Climate Insurance Initiative (MCII) and the International Climate Initiative (IKI), aims to protect low-income inhabitants of the Caribbean region by providing insurance against extreme weather events.

The project, updated this month, is set to run through 2019 and targets households in Belize, Grenada, Jamaica, Saint Lucia and Trinidad and Tobago, according to the project prospectus. The MCII and IKI are coordinating the initiative with various insurers and climate change organizations in partner countries.

The project's microinsurance scheme targets the poorest inhabitants of storm-stricken island nations - those who frequently suffer the hardest impacts from hurricanes, and backers hope to utilize success with the program to discourage skepticism in other nations considering micro schemes of their own.

"There is no better way to mitigate and transfer risk than through insurance," said former Costa Rica president José María Figueres, co-founder of the conference sponsor Ocean Unite, as cited by media outlet News Deeply.

What is ocean risk?

As reported in News Deeply, which covered the summit in Bermuda, ocean risk is not yet a widely used term. However, the summit's organizers, particularly the Bermuda-headquartered insurance and reinsurance company XL Catlin, are working to make it so.

At the summit, UN special envoy for ocean concerns Peter Thompson explained the underlying concept as risk associated with the "quickening cycle of decline" in marine ecosystems.

With warmer oceans fueling last year's back-to-back Caribbean hurricanes and sea levels rising, insurers increasingly view climate change risks as distinct from extreme weather catastrophes that have occurred in similar patterns for centuries.

Pictured: Damage from Hurricane Irma on the island of Tortola in the British Virgin Islands.

Climate shifts are now not only exacerbating these storms, but may also reduce global fish catch, redistribute fisheries, harm aquaculture, increase pathogen risks from algae blooms and hurt tourism businesses that rely on healthy coral reefs, to name a few examples from a report by the International Union for Conservation of Nature, which was commissioned for the summit.