The UK Foreign Secretary, David Lammy, has emphasized the need for the City of London to enhance its response to climate-induced emergencies by utilizing the nation’s financial expertise to safeguard at-risk communities.

Lammy’s appeal comes as the Caribbean prepares for the onset of its hurricane season, which officially started this past weekend. Among the areas facing potential danger are five British overseas territories.

The UK has been financially contributing to the Caribbean Catastrophe Risk Insurance Facility (CCRIF), a pioneering insurance initiative established with UK assistance in 2007. This facility aids susceptible nations in swift recovery following hurricanes, having disbursed over $84 million in rapid response funding after Hurricane Beryl struck last year, including an unprecedented payout of $55.5 million to Grenada.

The quick dispersal of these funds within a two-week timeframe aided in the restoration of public services and provided essential resources like food, water, and medical supplies.

This swift response from the CCRIF is attributed to its parametric insurance model, which automatically triggers payouts based on predetermined weather events rather than requiring damage assessments afterward.

However, these financial responses are minimal when compared to the extensive devastation caused by hurricanes, which has led to damages estimated at nearly $9 billion across the Caribbean.

With the escalating risks associated with climate change, Lammy advocated for more nations to engage in insurance frameworks like the CCRIF, highlighting that enhancing accessibility is crucial in this regard. He referred to the CCRIF as a “remarkable example” of collaborative efforts between the City, the insurance sector, and public entities to benefit society.

Prior to the upcoming London Climate Action Week, Lammy stated: “The support provided by the UK through the Hurricane Beryl insurance fund exemplifies the future of disaster risk management. It is innovative, timely, and aids real individuals in rebuilding their lives following catastrophic events. This initiative represents a perfect synergy of private and public sector advancements, leveraging the financial acumen of the City of London to support our partners in the Global South.”

The CCRIF currently reallocates roughly $1.5 billion in risk from various nations to financial markets each year and has distributed nearly $390 million within two weeks following disaster events. As climate change progresses and extreme weather events become more common, this model provides a framework for a quicker, more efficient, and equitable global response.

The five British overseas territories in the Caribbean—Anguilla, the British Virgin Islands, the Cayman Islands, Montserrat, and the Turks and Caicos Islands—are all participants in the CCRIF, as noted on the facility’s official website.