Panama shares experience in parameter assurance

The The Republic of Panama started relations with the Caribbean Disaster Insurance Fund (CCRIF)since 2018 with the acquisition of the first disaster risk transfer instrument, and with this advantage the portfolio of financial instruments for national risk has been strengthened, said the Deputy Minister of Finance, Jorge Luis Almengor, at the inauguration of the Regional Technical Workshop for Central America on Parametric Insurance and CCRIF Policies, in in the context of disaster risk financing.

He added that from that moment on Ministry of Economy and Finance (MPEG), maintains a close relationship with the CCRIF team of experts. “I hereby thank CCRIF for considering us as the venue for this workshop and also the World Bank (WB) team for their support in financial disaster risk management from various initiatives in Panama.”

For his part, he Director of the Sector for Investments, Concessions and State Risks UPCGFrancisco Álvarez, confirmed that Panama, as the venue for this regional event, brought together all risk management, especially the ministries of finance of Central America, the Caribbean and the Dominican Republic, as well as other institutions related to the topic of risk management. .

“Risk transfer is an important element of our investment strategy. financial management and advantage Having this instrument available means being able to access its benefits in the event of excessive rain, allowing us to address those eventualities,” Álvarez said.

He emphasized that it is important to take care of why, when and how a disaster occurs. It is necessary to understand that disasters, due to their unpredictable nature, require reallocation of resources, for attention in the response. This makes them a tax risk. The risk transfer instruments they have the ability not to affect the fiscal space in case of disasters.

He director of MEFhe assured that, for now Panama maintains an excess rainfall policy and “we are in the process of expanding our policy portfolio, for which we are considering the purchase of other excess rain policies, with the interest of the Republic running two policies, but with different parameters for high-frequency, low-impact events and low-frequency, high-impact events Accordingly, we are evaluating the inclusion of a parametric earthquake insurance policy and expanding the portfolio with other risk transfer instruments.

He indicated that some of the risks facing the country are droughts, avalanches, floods, including urban flooding and other elements that can be catastrophic, such as volcanic eruptions and tsunamis. These events can happen in the country and will always be present, so it is necessary to expand and strengthen the strategic framework to try to avoid or mitigate the effects that these events can have on the population and development of the country.

He said that the most important goal of the workshop was socialization, since, having local institutions in the country, such as the Chief Inspector of the Republic, the Hydrological Meteorological Institute of Panama, the Institute of Geosciences, Sinaproc, Comprehensive Disaster Risk Management OfficeSupervision for insurance and reinsurance, expand and strengthen knowledge about this type of instruments that are often misunderstood or the purpose for which they are acquired is misunderstood.

“With this kind of action, we are strengthening Public finance having a base on which we can work forward in relation to disasters,” Álvarez pointed out.