Commonwealth governments consider shared disaster insurance plan

A feasibility assessment by the Sustainable Markets Initiative supports a proposed reinsurance facility owned by participating Commonwealth governments, the organisation said. The proposal, called Commonwealth Mutual, was presented at a Commonwealth Heads of Government Meeting forum in Antigua and Barbuda on Thursday 5 November, attended by representatives from 42 governments.

Under the proposal, participating countries could pool their exposure to natural hazards and obtain insurance through a shared reinsurance arrangement. Potential coverage includes hurricanes, cyclones, flooding, drought, unusually heavy rainfall and earthquakes. The Sustainable Markets Initiative said it is working with Commonwealth governments on a business proposal covering the facility's financial requirements and operations.

The proposed facility would operate alongside existing regional arrangements, including the Caribbean Catastrophe Risk Insurance Facility, according to the Sustainable Markets Initiative. It could distribute disaster risks among member countries, help governments access funds after emergencies and improve terms for international reinsurance.