Joint press release of Ministerio de Hacienda de Costa Rica, Superintendencia General de Seguros de Costa Rica (Sugese), and the Global Shield against Climate Risks
15 July 2024, SAN JOSÉ – Costa Rica’s Ministry of Finance and the insurance regulator Superintendencia General de Seguros (Sugese) held multi-stakeholder consultations last week to identify the country’s most pressing financial protection needs in the face of accelerated climate shocks. These in-country consultations are a key component of the G7- and V20-led Global Shield against Climate Risks (Global Shield).
The Central American country is particularly vulnerable to the impacts of climate change, including frequent and severe flooding, hurricanes, and slow-onset events like rising sea levels and droughts. The Global Shield responds to these challenges by enabling faster and more effective assistance to affected people and communities, thereby lowering the economic and social cost as well as fiscal impact of disasters. In order to assess country needs, the Global Shield facilitates exchanges between key stakeholders in the field of climate and disaster risk management, including Civil Society Organisations (CSOs) and the private sector.
Costa Rica is the first Global Shield pathfinder country to initiate the process in Central America and, as such, can serve as a model for other countries in the region, especially on planning and designing country-specific financial protection packages. Under the leadership of the Ministry of Finance and Sugese, last week’s multi-stakeholder consultations addressed financial protection priorities and gaps, taking into account financial protection programmes that already exist.
Workshop participants ranged from distinct government officials to local insurance companies, representatives of the civil society, high-level representatives and experts from donor countries and academia. The key outcomes are a semi-final version of the country’s stocktake and a first outline for the gap analysis, which will be fleshed out over the coming months. Beyond that, with more than 90 institutions participating, a wide range of stakeholders received detailed information about the Global Shield, its In-Country Process and the different support options available through the Global Shield Financing Structure. In addition to some initial key gaps, participants identified further stakeholders, contributing to the finalisation of a comprehensive stakeholder mapping.
As a next step, the Ministry of Finance and the superintendency will oversee the elaboration of the gap analysis, which will then be used as the basis for the development of the request for support to the Global Shield.
Mr Luis Antonio Molina Chacón, Costa Rica’s Vice Minister of Expenditures of the Ministry of Finance, stated: “The climate vulnerability of Costa Rica also has an impact on public finances. The fiscal consolidation process in our country is not only focused on the current fiscal situation but also aims to ensure that in the medium and long term, the country can have protection mechanisms against the impacts of climate change.”
Mr Charles Schmit, Chargé d’áffaires en pied at the Embassy of Luxembourg in Costa Rica, pointed out: “This event marks a significant step towards building a collaborative and efficient response to climate challenges. Costa Rica is facing extreme events, posing significant threats to both the environment and livelihoods. The Global Shield provides a valuable platform to develop and implement systems that improve the preparedness and resilience of communities that need it the most.”
Mr Tomás Soley Pérez, General Superintendent of Insurance (Sugese) and Securities (Sugeval), highlighted that “the support provided by the Global Shield is of great importance for the development of public policies and the elaboration of a risk management strategy that will allow the country to access the necessary financing for socioeconomic recovery after a climate disaster.”
© Eduardo Lopez
Launched at COP27 by the Vulnerable Twenty (V20) Group of Finance Ministers and the Group of Seven (G7), the Global Shield against Climate Risks aims to increase protection for climate-vulnerable economies and communities by providing and facilitating substantially more and better pre-arranged and trigger-based finance against disasters and climate risks. Greater financial protection and faster and more reliable disaster preparedness and response will contribute to effectively responding to losses and damages from climate change.
The Superintendencia General de Seguros de Costa Rica (Sugese) is responsible for the authorisation, regulation, and supervision of individuals and entities involved in activities or contracts related to insurance, reinsurance, public offerings, and conducting insurance business. Its objective is to ensure the stability and efficient functioning of the insurance market, as well as to provide comprehensive information to policyholders. It is a highly autonomous body attached to the Central Bank of Costa Rica.
PRESS CONTACTS:
Global Shield Secretariat: secretariat@globalshield.org
Sugese: molinalm@sugese.fi.cr