Given that the latest spate of climate change related catastrophes affecting largely uninsured poor countries, should commercial insurance based policies be made available to these people?
By: Ringo Bones
It is a quite a sobering thought that over 90 percent of the
surviving victims of Typhoon Haiyan that hit Tacloban City in Leyte of the
central part of the Philippines back in November 8, 2013 don’t have any kind of
insurance policy. A little over six months after the tragedy, a majority of the
survivors are still scrimping and saving their own hard earned cash to fix
their own homes and small business establishments since they don’t have any
insurance payouts to collect and use to fix their own homes damaged by the most
powerful typhoon on record so far to ever hit landfall.
Trevor Maynard of Lloyd’s of London says current models used
to predict disasters use historical data and the insurance company’s latest
actuarial studies have shown that hurricanes poses the greatest damage in terms
of payout costs when it comes to insurance policies tailored to meet latest
climate change related catastrophes. Given that the world’s major insurance
providers dismiss providing insurance services for the world’s poorest uninsured
since such business schemes are “not economically viable” from their
perspective, could insurance providing schemes based on Muhammad Yunus’
microfinance banking be a solution?
Even though various kinds of microfinance insurance schemes
already exists, creating one as a basis for a “insurance companies without
borders” that would provide insurance coverage of climate change related
catastrophes for the world’s poorest could solve the problem of typhoon and
flooding victims unable to start over after their homes and businesses,
livestock, farms, etc. are destroyed. Such solutions are likely to succeed
given that they are congruent to existing conventional insurance underwriting
schemes – except they are underwritten by a local microfinance banking scheme.
