The Commonwealth Disaster Management Agency (CDMA) was originally launched in 2000, and was welcomed by the Finance Ministers at their meeting in Malta that year. It was targeted at the Small States of the Commonwealth, offering them insurance against the financial effects of meteorological and geological natural disasters, including the rapid disbursement of upwards of $50 million within days of the event. The principal elements of the programme were set out in the Commonwealth Reference Yearbook of 2008.

In 2004, the President of the World Bank, James Wolfensohn, impressed by the Bank’s inability to meet the immediate needs of the victims of such events, invited CDMA to enter negotiations with his officials to explore the scope for collaboration over delivering rapid assistance in the case of catastrophic natural disasters. These discussions were exhaustive but inconclusive. The Bank subsequently launched an insurance scheme for the Caribbean, (CCRIF) which incorporated significant elements of the CDMA Programme.

In their Lake Victoria Declaration on Climate Change in 2007, Commonwealth Heads of Government highlighted CDMA’s insurance proposals for small states as a significant component of the Commonwealth’s support for natural disaster management in member states. CDMA will report to the Heads when they meet in November 2009.

In response to this challenge, CDMA has established a strategic relationship with HSBC Insurance Brokers and HSBC Insurance Management (Bermuda) Limited businesses.

At the Annual Meeting of the World Bank and the IMF in Washington DC in the autumn of 2008, CDMA and HSBC Insurance Management (Bermuda) Limited agreed terms which provide for HSBC to set up a dedicated insurance segregated account in Bermuda, specifically to mitigate the impact of natural disasters on small and developing states and regions. The segregated account will be managed by HSBC Insurance Management (Bermuda) Limited and an Advisory Board. As part of a leading global financial institution with a substantial insurance division, HSBC Insurance Brokers will provide insurance services from its network of offices and subsidiaries throughout the Commonwealth and beyond.

Underwriting and reinsurance capacity from two leading reinsurers has been arranged.