Citation

Baarsch F, Kelman I. Jamba 2016; 8(1): e288.

Affiliation

University of Agder, Kristiansand, Norway.

Copyright

(Copyright © 2016, African Centre for Disaster Studies, North-West University)

DOI

10.4102/jamba.v8i1.288

PMID

29955298

PMCID

PMC6013995

Abstract

One group of locations significantly affected by climate-related losses and damage is the Small Island Developing States (SIDS). One mechanism aiming to reduce such adverse impacts is insurance, with a wide variety of products and models available. Insurance for climate-related hazards affecting Pacific SIDS has not been investigated in detail. This article contributes to filling this gap by exploring how insurance mechanisms might be implemented in the Pacific SIDS for tropical cyclones and droughts. The study examines opportunities and constraints or limitations of some existing insurance mechanisms and programmes as applied to the Pacific SIDS. Eight insurance mechanisms are compared and discussed regarding the premium cost compared to the gross domestic product per capita, the amount of payout compared to the damage cost, the reserve and reinsurance, and the disaster risk reduction incentives. As such, this article offers a decision-making tool on insurance development for the Pacific SIDS. Ultimately, implementing disaster insurance for the Pacific SIDS depends on political will and external technical and financial assistance.

Language: en