Climate Risk Adaptation and Insurance in the Caribbean (CRAIC)

The Caribbean region is highly exposed to tropical storms, hurricanes, flooding, and naturally induced disasters. These hazards represent a significant risk to the inhabitants and economies of the Caribbean countries. The Climate Risk Adaptation and Insurance in the Caribbean (CRAIC) project, led by Munich Climate Insurance Initiative (MCII), assists Caribbean countries in their efforts to increase social resilience and adapt to climate change by incorporating climate risk insurance within a broader framework of disaster risk reduction strategies.

Project period

October 2018 – March 2020


German Federal Ministry of the Environment, Nature Conservation and Nuclear Safety / International Climate Initiative


Munich Climate Insurance Initiative (MCII) (Lead)
University of the West Indies


©Ivan Wong Rodenas via Flickr, CC BY-NC 2.0

The project aims to refine and expand the index-based parametric Livelihood Protection Policy (LPP) to make it more useful and accessible to all people in the Caribbean, especially individuals and communities vulnerable to climate risk. The Livelihood Protection Policy (LPP) is a weather index-based insurance policy triggered by strong winds and/or heavy rainfall during hurricanes and tropical storms. Targeted at individuals of different income level or sector, the LPP provides direct cash payouts after a weather event, enabling policyholders to address damages and losses shortly after the event.

The product is suitable for farmers, fishers, crafts people, and tourism sector workers, whose livelihoods can be critically affected when a natural disaster strikes. The CRAIC project links insurance with disaster risk management (DRM) by educating potential LPP holders about other necessary steps before and after a natural hazard and providing corresponding material and services (DRM educational material, guide on preparedness measures, pre-event alert text messages).

Research component

The CRAIC research component, conducted by Climate Analytics together with the University of West Indies (UWI), aims at creating empirical evidence of links between community resilience and livelihood protection schemes, more specifically insurance. Through household behavioural changes towards DRM before and better coping capacities after an extreme event, the LPP potentially increases resilience in three dimensions: adaptive, absorptive and anticipatory capacities. Further, gender-specific challenges of DRM will be captured and specific recommendations on gender-inclusive community-based risk management approaches will be presented.

The research component focuses geographically on the Dennery region on Saint Lucia. Farming and fishing households are the target groups of the study. The research design revolves around two-period household surveys (baseline and endline), which will be jointly conducted by Climate Analytics and the University of West Indies as well as qualitative interviews with key stakeholders. The baseline survey of 600 households in the beginning of 2019 informs the household response-based resilience indicators as well as gender roles and functions in livelihood activities and decision-making. The endline survey a year later will be used in conducting a project evaluation of the insurances’ benefits through econometric methods. The qualitative interviews provide more detailed information on gender-specific components of DRM and livelihood activities.

The research results in three reports detailing different perceptions of climate change and corresponding coping strategies of farming and fishing households, a list of DRM decisions influenced by having an insurance (peace of mind-effect) as well as gender-specific aspects and the improvement in resilience associated with insurance payouts after an event.