- Where Insurance & Technology Meet

Climate Change, Big Water, and Parametric Disaster Coverage

Over the last few decades, climate change has garnered interest and concern.  With the exception of a few deniers, most folks recognize that more destructive events – water, fire, etc. – will cause damages and injuries, some of which will be life threatening.

Climate change events can be dramatic, but, in the overall scheme of things, automobile accidents are more obvious. For example, as bad as the recent fires were in California, homes and roads will be re-built in the same space. Jeff Hill, who lived in Paradise, was quoted by NBC news as saying,  “I’ve lived here my whole life, so I couldn’t imagine going anywhere else.”

Well said.  But what happens if you “cannot imagine anywhere else” where “anywhere else” is the only place to go?

Marshall Islanders are experiencing changes in places that may not result in expected outcomes. And they might be an example of things to come.

Out in the Big Water …

The Marshall Islands are an inhabited collection of 29 coral atolls and five islands, located a few degrees north of the equator and just west of the date line.  According to Wikipeadia, the Marshall Islands’ original inhabitants migrated from the south and landed in the 2nd millennium BC.

From back then to the middle of the 20th century, the Marshallese lived primarily on fish,  fruit, and vegetables, all taken directly from the water, the land, or the trees. The best fishing comes from atolls, which calms the ocean waves.  It’s like a lake in the middle of big waves.

However, the Marshallese are facing unprecedented challenges. These are (1) direct human intent, and (2) indirect alterations from outsiders.

1) Direct Human Intent.

At the end of World War II, the US wanted to test atomic explosions to ensure that enemy threats could be detoured.

The US had taken the Marshall Islands from the Japanese.  For the test, Bikini Atoll was selected as ground zero.  The 167 Bikini Atoll residents were persuaded to leave the atoll while the tests were underway.  The US folks assured the residents that they would be back on Bikini as soon as the tests had ended.

In July 1946, with thousands of military and civilian personnel conscripted, there was a ‘Monstrous Success’.  S.C. Gwynne penned a post “Paradise with an Asterisk” which described what happened:

Detonated under the ocean’s surface, it drove a 2,000-foot-wide column of water high into the sky in less than a second. A few moments later, millions of tons of atomized reef and water collapsed back into the lagoon, and a giant shock wave moved out across the water, sinking the 26,000-ton, 562-foot battleship Arkansas and lifting the stern of the 880-foot Saratoga 43 feet into the air.

The Bikini islanders had expected to return shortly, but the testing continued until 1958. In 1968, the Bikinians were allowed to go back home, but they were almost immediately removed after getting tests from the islanders. The Bikinians were finally returned in 1987; 40 years on.

2) Indirect Alterations from Outsiders.

Writing recently in National Geographic, John Letman notes that  “powerful tropical cyclones, damaged reefs and fisheries, worsening droughts, and sea-level rise threaten the coral reef atolls of this large ocean state, forcing the Marshallese to navigate a new reality.”

At present, increased amounts in melting ice (600 billion tons) is absorbing heat twice as fast as 18 years ago. The Intergovernmental Panel on Climate Change (IPCC) notes that mean sea level rise between one and four feet.

Mitigation may not be enough.

As Majuro is six feet above sea level at the highest point, this is an imminent threat.  In this environment, Marshall Island’s President Hilda Heine told National Geographic that there is a need for a greater emphasis on adaptation, including consideration of building higher ground.

Heine said: “For considerations, people would need to think whether we should just let our islands go and everybody move out or having a certain place designated and built upon.”

Strong stuff.

And there is insurance support

On 28 September 2018, the World Bank approved a grant of US$2.5 million which will pay the for Republic of the Marshall Islands premiums for Parametric disaster insurance coverage.

Michel Kerf, World Bank Country Director for Timor-Leste, Papua New Guinea and the Pacific Islands, said:

“This additional funding will ensure the Marshall Islands can continue its participation in the Pacific Catastrophe Risk Assessment and Finance Initiative, which will deliver essential funds for recovery in the event of a major natural disaster.”

Where does this go?

The Marshall Islands are at the forefront of changes to the ocean which will expand to other areas.  The Marshallese leaders are facing changes now that will impact other ocean facing countries.  The leaders have visited the United Nations several times.  Perhaps it is time to listen.

Your thoughts?

Tags: ,