‘Blue insurance’: Community-crafted climate insurance plan unveiled

Fisherfolk, farmers and coastal communities are on the verge of accessing affordable, tailored climate disaster insurance, as the Barbados Association of Non-Governmental Organisations (BANGO) unveiled an insurer-backed prototype at its final consultation session on Tuesday.

The session at the Oceana Innovation Hub on Bay Street marked the culmination of years of consultations under the Caribbean Policy Development Centre’s (CPDC) Capacity Development Project titled Multi-Actor Partnership for Pro-Poor and Gender-Equitable Climate Risk Financing in the Context of the IGP’s 2025 Vision. 

Funded by the German Federal Ministry for Economic Cooperation and Development (BMZ), the regional initiative has been rolled out in five countries—Antigua and Barbuda, Barbados, Grenada, Jamaica and Dominica—with Barbados now entering a critical phase: shaping the final version of a “fit for purpose” insurance product to be piloted locally.

Dr Marcia Brandon, former BANGO Secretary-General and co-founder and director of Innovation and Entrepreneurship at the Caribbean Centre of Excellence for Sustainable Livelihoods (COESL), emphasised targeting vulnerable groups in the blue-green economy, noting past events like Hurricane Beryl left many fisherfolk uninsured. She highlighted various designs by fisherfolk and farmers, now introducing an insurer’s affordable prototype for final tweaks.

She said: “People who are living in vulnerable and risky situations as it relates to climate disaster, people on coastlines, farmers, fisherfolks, and people who make their living from the sea, so in the blue and green economy pretty much, we have been helping them to understand that climate disaster risk insurance could actually be a tool or an instrument that could help them to get back on their feet quickly after a disaster.”

According to her, those same interest groups have been building and refining insurance concepts through repeated rounds of feedback.

“They have actually created these insurance products… which would suit or would be fit for purpose to help them if a disaster came. We have iterated that… once a fisherfolk did a product, we would take it to another group of fisher folk and they would look at it and say, ‘OK, this is cool, this is cool, but maybe we need this as well,’ and they add something else in.”

Now, she said, the process has reached a turning point.

“We now have an actual product from an insurance company that’s making a proposal to say this is the product that we are proposing. This is affordable. This is accessible… you will be able to get this quickly.”

But she stressed that even this prototype insurance is not the end of the process.

“When I say final product, I’m sure there are going to be iterations because once we get feedback from this group, we will then go back to the insurance company… because we wanted to meet the needs of the people and not just make money for the insurance company.”

Dr Christopher Walton, the current BANGO secretary-general, stressed customising insurance for Barbados-specific risks, from flooding in lowland areas like St James to wind damage in highlands such as St Joseph.

“Insurance is something that is needed by everyone, but this is a time where we can actually put in the input. And it’s not a one-size-fits-all,” he said.

Drawing from international experience, he added: “Everybody is different, every need is different, and to have this opportunity where we can sit down and craft something that is specific to the region and area we are is something that we shouldn’t take lightly.”

He broke down how risk varies even within Barbados: “The people here in this area that’s gonna deal with flooding issues because storm surge, flooding, they are literally gonna have a different outlook than St Joseph. ’Cause St Joseph ain’t gonna deal with flooding… They’re gonna deal with the wind… erosion. Now the people at the bottom of the hill, they’re gonna deal with all that runoff.”

Even so, the main challenge is changing mindsets.

Dr Walton said: “It was years before Barbados saw a hurricane, so people got complacent like: ‘OK, why am I paying money for something that’s not gonna happen.’ So now that it’s really starting to pick up, it’s changing that mindset.”

He acknowledged accessibility concerns and the need for a digital process to overcome paperwork barriers for busy workers, because Barbados “is paper-heavy”. Referring to fisherfolk, he said: “The more time they spend on their boat, the more money they make. So any time off of their boat is less money they make.”

This means the product must be streamlined and possibly digital to reduce red tape, he said.

The proposed solution discussed at the session includes a hybrid parametric insurance model. Olivia Chase, Senior Development Specialist at CPDC, explained how it would function.

“Ideally, what you would like to have is a number of persons who are in the pool… who in the event where there is a climatic event such as a hurricane and there is a trigger… once we are able to confirm that… you will be eligible for a payout.”

She clarified that payouts would be tied to measurable triggers such as wind speed or excess rainfall and confirmed by official bodies such as the Barbados Met Services.

“They have also indicated that you can qualify for more than one payout in a policy year… as long as your premiums are paid.”

She further explained that consultants have recommended a three-layer hybrid model: a parametric layer for rapid payouts once triggers are met, an indemnity layer to provide immediate support for operational expenses, and a savings component possibly managed through partnerships with credit unions or cooperatives.

Hosting the final session at the Oceana Innovation Hub also underscored the connection between climate education and community resilience. 

Director Ché Greenidge said: “This facility is under the mandate of the Ministry of Educational Transformation in Barbados… we’re focused on climate education, and we’re focused on ocean literacy here, but beyond that, I truly believe that education is about lifelong learning.”

For Dr Greenidge, the insurance discussions were just as important as classroom lessons.

“It’s great that we’re able to see so many [community service organisations], fisherfolk also involved in the workshop session on climate disaster and risk finance insurance. That’s very critical. It’s an important discussion, a conversation that we need to be having right now.”

The initiative is intended to build community resilience beyond physical infrastructure, providing liquidity to avoid debt or asset sales post-disaster. It promotes awareness, preparedness and equitable access, contrasting macro tools like the Caribbean Catastrophe Risk Insurance Facility(CCRIF) by focusing on micro-level needs.

With the final engagement session now complete, the feedback gathered at Tuesday’s session will inform revisions before the pilot insurance product is rolled out.