Preempting the next disaster: Catastrophe insurance and the financialization of disaster management

Abstract

The 2007 launch of the Caribbean Catastrophic Risk Insurance Facility (CCRIF) introduced a new mechanism of state security against the uncertainties of climate change. Proponents argue that increasing the ability of member-states to finance disaster recovery through catastrophe insurance mitigates the effects of increasingly frequent and intense hurricanes and thus contributes to climate change adaptation. In contrast, I offer a critical analysis of the CCRIF that draws out how it facilitates what I call the ‘financialization of disaster management’. The introduction of financial logics and techniques enables the state and capital to visualize a population’s self-organizing adaptive capacity as both a threat to state-based forms of order and a value that can be leveraged on capital markets as catastrophe risk. Leveraging enhances a state’s ability to repair its critical infrastructure and preemptively negate undesirable adaptations. The CCRIF blends risk pooling with parametric insurance techniques to turn the uncertainty surrounding a population’s immanent adaptability into catastrophe risks that can be leveraged to enhance state security and capital accumulation in an emergent environment.