Caddle calls for insurance reform as climate threat looms

Barbados is at a critical juncture as it braces for another hurricane season, with a backbench parliamentarian warning that the country’s current insurance regime is ill-equipped to protect its citizens from catastrophic loss amid mounting climate risks.

Minister of Industry, Innovation, Science and Technology and MP for St Michael South Central, Marsha Caddle on Tuesday urged sweeping reforms to ensure insurance is more equitable and accessible for all Barbadians.

In the House of Assembly debate on a bill to amend the Insurance Act, Caddle made a strong case for reimagining the role of insurance in national resilience, especially as the island faces increasing climate-related threats.

“Insurance liability and responsibility is spread more evenly between the private sector and the public sector,” she explained. “In most other economies the private sector carries more of the burden. For insurance, that is one of the reasons when we have the climate conversation we talk about the possibility of wipe-out risk. We talk about the possibility that if something happens that completely devastated the country.”

According to Caddle, Barbados not only faces high exposure to natural disasters, but also suffers from a chronic lack of adequate insurance coverage, especially at the individual level, stating: “Not only is the country at the individual level, grossly underinsured, but we had to build over the years the capacity for the state to make up for that.”

She pointed out that in larger countries such as the United States, insurance coverage is often diversified and expansive enough that even when a hurricane hits one region, private insurers are able to respond quickly and absorb the financial blow.

“In our part of the world our single small island hit by a major extreme weather event, is more likely to have been devastated completely, and that degree of loss cannot be covered by any regular insurance,” Caddle said.

She stressed that the current discussion is not just about legislative adjustments but about national survival and equity in the face of climate risk.

“This is not just an academic exercise; this is not just a question of changing from a statutory fund to a more flexible regime, this is about how do we secure the well-being of Barbadians, not just with respect to their living conditions, the homes in which they live, the assets that they hold, the small farms that they have that help feed their family, that will be wiped out in an extreme weather event, their health care and the way that they that they live, their investments and the way they plan their estates so that so that they can leave something for their families.

“These are the kinds of conversations that we need to be having and this legislation starts to take us towards a more accessible insurance framework and regime.”

She noted that conversations around insurance—both as a financial instrument and as a social safety net—are long overdue.

She said: “We are at the start of another hurricane season, and the fact that we are still hearing about the underinsurance of individuals with respect to homes and other assets is worrisome.”

She argued that affordability and access must be central to any reform efforts: “Access to adequate insurance instruments is itself a conversation. To what extent are we able to create instruments to which people find affordable and which people find valuable . . . that remains an ongoing conversation, but it has to be part of the conversation.

“These are the kinds of conversations we need to be having,  and this legislation starts to take us towards a more accessible insurance framework and regime.”

(SB)