Swiss Re to expand disasters fund to several Caribbean, Latin American markets

Reinsurance giant Swiss Re plans to replicate a natural disaster microinsurance fund in Haiti across several Caribbean and Latin American countries in the coming months, company public sector VP Nikhil da Victoria Lobo told BNamericas. Earlier this year, Swiss Re co-launched the Microinsurance Catastrophe Risk Organization (MiCRO), which is administered by the Caribbean Development Bank and funded by international donors. The fund started operations in Haiti, where the Zurich-based reinsurer has covered about 50,000 clients of the country's largest microlender, Fonkoze. The fund can now be replicated across other countries in the region, since MiCRO already has the platform and technology in place, as well as investor interest, da Victoria Lobo said. The initial capital of 955,000 British pounds (US$1.6mn) has been contributed by the UK government, with an additional US$1mn-2mn already making its way into the fund, da Victoria Lobo said. "The idea is really to start growing this as new clients and businesses are brought into MiCRO," he said. "I think we have come up with a model that is commercially viable, particularly as it gets more and more scale." MiCRO coverage is available for every new micro loan. If the home or business of the client is damaged, Fonkoze will eliminate the outstanding debt and pay a fixed sum of 5,000 gourdes (US$125) toward rebuilding. Swiss Re made the first payments under MiCRO last month following heavy rains in Haiti. Da Victoria Lobo said that while it is the major catastrophes that attract the attention of the public and donors, "it is actually the smaller events that are really breaking the backs of the poor."