The Agricultural Insurance Market in the Caribbean
Agricultural insurance is a tool to manage agricultural production risks and help producers reduce the effects of negative shocks and improve the allocation of resources. It provides a mechanism to transfer a variety of risks faced by crop, livesto...
| Main Authors: | , |
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| Format: | Brief |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/03/17480783/agricultural-insurance-market-caribbean http://hdl.handle.net/10986/17030 |
| Summary: | Agricultural insurance is a tool to
manage agricultural production risks and help producers
reduce the effects of negative shocks and improve the
allocation of resources. It provides a mechanism to transfer
a variety of risks faced by crop, livestock, forestry, or
aquaculture production. The small island nations of the
Caribbean are highly exposed to tropical cyclones,
hurricanes, and other weather hazards-and are particularly
vulnerable to drastic losses from natural disasters. A
single catastrophic event can affect a large proportion of
clients, and this is often reflected in the insurance
premiums charged by local insurance companies, especially if
they only underwrite risk in one or a few neighboring
islands (as is common in the Caribbean). To be able to pay
many claims all at once, insurers must either purchase their
own insurance (re-insurance), which is expensive, due to the
high exposure to extreme weather events, or hold a large
amount of cash reserves. The development of market-based
agricultural insurance options in the Caribbean can range
from regional and macro-level applications (sector, country,
or groups of countries) to the micro-level (farmers). |
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