The European Commission and the World Bank have signed a $15.8 million agreement to fund a Caribbean catastrophe insurance fund.

The two organisations said the agreement will help Central American countries and the Dominican Republic gain access to catastrophe risk insurance.

The CCRIF SPC, formerly the Caribbean Catastrophe Risk Insurance Facility, is a multi-country programme with 17 members, including Bermuda.

The coverage includes hurricanes, earthquakes and excess rainfall and the new agreement will be run by the Multi-Donor Trust Fund.

Neven Mimica, the EU Commissioner for International Cooperation and Development, said: “The European Union’s contribution to this multi-donor trust fund for Central American countries and the Dominican Republic is a reflection of our shared concern for the need to support partner countries towards building resilience to disasters and climate change, a concern that has led to an increase in funding for climate change in the EU’s development priorities.

“The urgency of the situation calls for action now, which is why we are particularly pleased to be able to make this announcement.”

Jorge Familiar, World Bank vice-president, added: “For small economies, tackling climate change and disaster risks effectively requires efforts at the regional level since effective solutions call for risk pooling.

“This is critical for Caribbean and Central American countries that are increasingly vulnerable to the effects of climate change.”

“The facility is a good example of a regional public good where member countries will be able to benefit from insurance coverage at a more affordable rate.”