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FEATURE STORY September 20, 2019

Innovative Fisheries Insurance Benefits Caribbean Fisherfolk

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Caribbean boats damaged by storms    

World Bank


Each year, during the Atlantic Hurricane Season, tropical cyclones make landfall in the countries of the Caribbean, causing damage and affecting the livelihoods of people including vulnerable groups such as fishing communities, farmers, seasonal tourism and construction workers among others. The most recent example of the impact of these tropical cyclones is Hurricane Dorian and we have seen heartbreaking images of damage and destruction for most of the archipelago of The Bahamas.

High winds, strong rainfall and storm surges often affect countries in the region leaving devastation and losses to the fishing industry. Evidence has shown that after climate-related events, fishing communities have suffered impacts such as loss of productive assets – boats, vessels, fishing gear, and ice facilities, and have experienced reduced coverage and quality of public services such as electricity, fueling stations, piers, and roads after such events. These losses hamper the potential to catch, preserve and deliver products to market with disproportionate impacts on poorest communities.

According to Julian Alexis, Manager of the Soufriere Fishermen’s Co-operative in Saint Lucia, “It is difficult for the cooperative because right after the storm they want to go out, but they don’t have the finances to recover (…) none of the societies or the people in the cooperatives have access to insurance at this point.”


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Caribbean fisherman    

World Bank


The fisheries sector in the Caribbean is a major source of livelihoods and contributes significantly to the food security of the region as well as the tourism sector which many islands depend on. The fisheries sector employs over 300,000 people in the Caribbean, both directly and indirectly (through sales, packaging, etc.). Many of the fisherfolk in the region reside in rural communities where fishing and farming are the primary economic activities.

While the sector is highly vulnerable to climate hazards like storms, it has the potential to also bounce back quickly, and as soon as fisherfolk have favorable weather conditions and functioning boats, they can resume fishing and provide food to communities that could otherwise be isolated after a disaster. Rapid recovery of the fisheries sector after a disaster is therefore critical for the food security of many communities in the Caribbean, therefore, any scheme supporting a quick recovery will contribute in many ways to lessen the overall impact of the disaster.

In response to these challenges, the fishing industry now can count on a parametric insurance product developed specifically for the fisherfolk in the Caribbean by the “Caribbean Oceans and Aquaculture SusTainability Facility (COAST). 

COAST was launched in two countries: Grenada and Saint Lucia. With financial support from the US Department of State, the World Bank, the Caribbean Catastrophe Risk Insurance Facility (CCRIF SPC), and the Caribbean Regional Fisheries Mechanism (CRFM) have developed this first ever parametric insurance for the fisheries sector, which is designed to enhance resilience against the impacts of climate-related disasters.

While it is the government that purchases the COAST insurance policy, the policy is unique as the final beneficiaries are the fisherfolk and other persons in the sector such as boat captains, fish vendors etc. The government disburses any payouts on the policy to these fisherfolk. Jose Angel Villalobos, the World Bank’s co-leader of COAST noted that “this product has been tailored, using state-of the-art knowledge, to the actual needs and interests of the final client, which in this case are the fisherfolk as defined by the government, as well as transferring the government’s specific contingent liabilities to the private sector.” 

The COAST product was designed to provide rapid payouts to fisherfolk after a “bad weather” event (based on high waves and heavy rainfall) or a tropical cyclone (based on wind and storm surge).  This brings some relief to the fishing community allowing them to recover more quickly.  “Fishers don’t have enough savings to meet the needs during or after an event,” says Joanna Melville, Manager from Gros Islet Fisheries Cooperative in Saint Lucia.

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Grenada fish vendors | World Bank

During workshops conducted in Saint Lucia and Grenada with fisherfolk, many were delighted with being able to access insurance for the first time. “As with any insurance, it gives you an ability to get something to start up… for fisherfolk, for any payout that they are going to receive, it will make up sort of for the down time. So, if you give them a little something that they can perhaps buy their food, or whatever it is for the time they are down” said Kaygianna Toussant Charleny from the Goodwill Fishermen Cooperative at Vieux Fort. 

An important feature of COAST insurance is that fish vendors for the first time are being covered by insurance, as COAST encourages all registered people working in the fisheries sector to be insured.

According to Sylvia Michele Diez, one of the World Bank’s co-leaders of COAST, "The ultimate objective of COAST is really to promote resilience in the fisheries sector and more sustainable fishing practices. As a first step, COAST is helping to formalize the sector by incentivizing fishers to get registered in exchange for the insurance."

According to CCRIF CEO, Isaac Anthony, “CCRIF is pleased to have brought to market another parametric insurance product – another innovative climate risk insurance mechanism that will be an essential tool to help address the impacts of natural hazards on food security and livelihoods of those working in the fisheries sector… a product that can be replicated for other small island developing states, many of which rely heavily on the resources of the sea for their livelihoods and their nutrition."

COAST Innovative Features:

  • First ever climate risk parametric insurance developed for the fisheries sector - spearheaded by the Caribbean. For the first time, vulnerable fishing communities will have access to insurance developed specifically for their needs.
  • COAST – a catalyst for promoting resilience in the fisheries sector, leading to a stronger blue economy in the region. COAST will reduce the risk that climate change poses to food security in the fisheries sector and incentivize policy reforms for the uptake of climate smart fisheries practices as well as coastal resilience. This will build a stronger foundation for the blue economy, while supporting the livelihoods of those who depend on this valuable marine natural capital.
  • First time insurance coverage of “bad weather” events, in addition to covering tropical cyclones. COAST innovates in covering losses attributed to the fisherfolk due to “bad weather” events, defined as high waves and occurrence of heavy rainfall throughout the policy year.
  • Rapid transfer of payouts to fisherfolk. CCRIF SPC payouts will be channeled through the Ministry of Finance of the participating countries within 14 days of the covered event, followed by a rapid transfer to the fisherfolk and other beneficiaries.
  • First time tracking of parametric fisheries insurance payouts at the scale of individual beneficiaries.  Through the predefined procedures for payout transfers, COAST allows for tracking the flow of funds down to the level of the beneficiaries, with a financial management and auditing system in place.
  • COAST encourages inclusiveness and participation of women. COAST is intended to be inclusive of all participants in the fisheries sector, including crew members, captains and/or boat owners, and also fish vendors and processors who are mostly women. The list of beneficiaries is predefined by the governments.

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