Due to climate change, the Caribbean is significantly more vulnerable to natural disasters, including hurricanes, tidal waves, landslides, flooding, and windstorms. It is critical to secure and safeguard water utilities due to their impact on the health and the economy. However, the insurance currently available to water utilities from existing providers, to help them recover from natural disasters, is too expensive and typically provides insufficient coverage.
Contracted by IDB Invest, K&M and Alliant Insurances Services Inc. (Alliant) are providing advisory services to develop and launch the Caribbean Water Utility Insurance Company (CWUIC). CWUIC will be able to provide utilities with adequate insurance to cover expected increases in the cost of losses suffered from natural disasters. Through CWUIC, water utilities could obtain natural disaster insurance on improved terms versus what they could obtain on their own. Additionally, investing in loss control measures supported by CWUIC can mitigate future losses, potentially reducing recovery costs and the time it takes to restore services while having the potential benefit of reducing insurance premiums.
Building from its 2019 CWUIC feasibility study, the K&M-Alliant team will begin the second phase of CWUIC’s development. In this phase, the team will engage with relevant stakeholders, develop a model to assess CWUIC’s financial viability under various scenarios, establish a post-disaster utility exchange support program, and update its recommendations on CWUIC’s the legal, operational, and financial elements.
By contributing to the development of CWUIC, K&M continues its commitment to strengthen climate resiliency for utilities in the Caribbean.