Jamaica’s DRF strategy effectively managed Beryl losses: Centre for Disaster Protection

A recent article by the Centre for Disaster Protection, written by Conor Meenan, Lead Risk Finance Adviser, highlights Jamaica’s risk financing strategy as effective in managing significant losses from Hurricane Beryl and demonstrates how pre-arranged financing can help mitigate climate shocks.

Hurricane Beryl struck Jamaica’s southern coastal areas in July 2024, bringing strong winds and flooding. The storm caused an estimated $200 million in damage and losses, equivalent to 1.1% of the country’s GDP.

Several financial instruments within Jamaica’s $1.6 billion disaster risk financing (DRF) strategy were triggered in response.

According to the article, the estimated cost of the hurricane’s impact on the government ranged between $85 million and $200 million.

A key feature of Jamaica’s DRF strategy is its risk layering approach, which combines different pre-arranged financing instruments to provide efficient and cost-effective protection against disasters of varying severity.

The country’s DRF strategy includes five main instruments, three of which have either provided or are eligible to provide payments to support the government’s response to Beryl.

The combination of pre-arranged funds in Jamaica’s contingency accounts, CCRIF’s automatic $26.9 million payout, and the IDB contingent credit line, which provides an additional $207 million in available funds, ensured the government had access to sufficient resources to cover the estimated response costs.

Overall, the article presents Jamaica’s disaster risk financing response as largely successful, demonstrating how a well-structured combination of financial instruments can provide fast and predictable funding for disaster response and recovery.

Jamaica’s active and strategic engagement with pre-arranged financing to address disaster risks and manage costs ahead of time can serve as a model for other countries looking to strengthen their disaster preparedness.

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