Insuring our future: Strengthening disaster resilience in Latin America and the Caribbean
In November 2023, the Urban Infrastructure Insurance Facility (UIIF) Project hosted its first in-person event in San José, Costa Rica. The gathering brought together representatives from various Latin American and Caribbean cities and ICLEI, united by a common goal: To enhance their understanding and management of natural disasters. The dialogue was a melting pot of experiences and methodologies, each city sharing its unique approach to disaster management.
“My city has topographical and rainfall characteristics that favor the occurrence of natural disasters. This event is important for helping us improve our municipal protection system while staying in line with the international strategies of the United Nations,” said Waldir Figueiredo Vieira, Undersecretary of Protection and Civil Defense, Belo Horizonte, Brazil.
UIIF supports cities in Latin America and the Caribbean to better manage their risks and, at the end of the process, acquire an insurance premium. The tailored insurance mechanisms provide rapid access to financial resources, covering critical infrastructure and residents most vulnerable to the impacts of such disasters. Through projects like UIIF, city officials can obtain financial and technical support, as well as a better understanding of their climate risks to make informed decisions.
Over the course of three days, the workshop delved into the role of insurance coverage in managing disaster risks, offering a learning exchange for city representatives to share their experiences and highlight how the UIIF project could bolster their efforts to protect vulnerable communities.
“With the type of tools that UIIF offers us, we can understand how important infrastructure is, not only as a service, but as a link with the citizens. This event is a fabulous opportunity to go beyond thinking about the problems we have; rather see them as a unique opportunity to face the change we need,” said Royee Álvarez, Manager of Municipal Management and Urban Development of San José, Costa Rica
Attendees also engaged in exercises to identify stakeholders and discuss disaster-related issues in their cities, building on the assignments they received during a virtual workshop held in October 2023. The event culminated with a visit to a collection center in Costa Rica to emphasize the importance of responsible municipal practices. Fostering a stronger foundation for the project, the workshop marked a significant milestone for UIIF, which will only elevate future gatherings, including the planned UIIF event scheduled during the ICLEI World Congress 2024 in São Paulo, Brazil on 18-21 June.
“We certainly learned a lot. I believe that the other city representatives learned quite a bit from us as well, and we want to pursue the UIIF instrument because we believe, like any other city, we are exposed to vulnerabilities that create that level of insecurity that we need to overcome. And so, with the facilities that are available and the assessments that we have done, we will now move forward,” said Robert Hill, Executive Director and Legal Representative of the Mayor of Kingston, Jamaica.
The event also spotlighted gender as a key issue, underscoring the disproportionate impact of natural disasters on women and the need for gender-sensitive policies. Women’s unique experiences and perspectives are invaluable in developing efficient adaptation and recovery solutions. Awareness building, sex-disaggregated data collection, and policymaking for inclusivity are essential steps toward a more equitable and resilient future. To this end, UIIF supports local governments to include a gender agenda while designing insurance products to increase the financial resilience of vulnerable groups, especially women.
Why focusing on insurance?
Andreas Bollmann, expert on climate risk finance and global reinsurance and founding partner of Faber Consulting AG, discussed the benefits for cities taking out insurance against climate risk now as opposed to waiting until after disaster strikes. Insurance is part of a comprehensive disaster risk management framework, rapidly providing financial resources after a disaster and offering financial stability in difficult times, he said.
“Unlike acquiring debt, which is paid by future city administrations and generations, insurance is acquired today, paid for by today, and benefits can be received the moment they are needed,” Bollman said. “This prevents cities from falling in default, or even worse, putting aside investment that the city needs to pay a debt.”
ICLEI Secretary General Gino Van Begin pointed to insurance as an essential part of an integrated urban adaptation strategy for disaster risk management.
“While we can anticipate a future that will not be very forgiving, we also have the opportunity to use it as a springboard to rise above those vulnerabilities and tap into a unique financial insurance solution that meets at the crossroads of local governments and the private sector,” Van Begin said. “The essence of the project is co-development and we will learn together to make our cities safe and resilient in an integrated way.”
To learn more, visit the Urban Infrastructure Insurance Facility website.
