Since 2014, the Multi-Donor Fund for the Central America and Caribbean Catastrophe Risk Insurance Program has supported countries in the region during some of their most challenging times through its cooperation with CCRIF SPC.
We discuss with Jorge Guillermo Escobar, Director of Institutional Planning and Development in the Ministry of Finance of Guatemala, about the country’s experience with these insurance policies.
This year, Guatemala experienced very intense rainfalls. What has been your experience using this insurance?
We’ve been part of the insurance psince 2019, and this is the second time the policy has been triggered in that period. The intense rains we experienced from June 13 to 19 activated the policy for a full payout.
The nature of the insurance is to provide immediate response funding within 14 days.
What types of response actions are carried out when the funds are received?
In this case, the funds were allocated to the Ministry of Health, the Ministry of Agriculture, and even the Ministry of Defense. These funds were used for items like emergency rations, epidemic prevention, family gardens, and vegetable crops, aimed at ensuring food security and nutrition.
If you had to highlight the lessons learned from using this type of instrument, what would they be?
Without a doubt, having a well-designed and implemented financial strategy has been extremely helpful. The goal is to ensure a better response from the State, especially through public finances, in response to these kinds of events.
What are the main challenges Guatemala faces in strengthening its financial resilience?
Looking ahead, we need to continue working on comprehensive risk management. At the Ministry of Finance, we view all events that can impact public finances whether by increasing debt or spending or, at times, reducing income as fiscal risks.
Interviewer: Álvaro G. De Pablo, Communications Associate at the World Bank
About the Central America and Caribbean Catastrophe Risk Insurance Program Multi-Donor Trust Fund
The Central America and Caribbean Catastrophe Risk Insurance Program Multi-Donor Trust Fund, created in 2014, has facilitated access to high-quality sovereign catastrophe risk transfers by supporting CCRIF SPC, the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company. In addition, it has provided technical assistance to vulnerable countries, enhancing their capacity to manage the financial impacts of disasters.
The success of the fund has been driven by the active leadership of the steering committee and the support of key donors, such as the Federal Republic of Germany, through the Federal Ministry for Economic Cooperation and Development (BMZ) and its Development Bank (KfW), the U.S. Department of the Treasury, the Government of Canada, and the European Union (EU).