WJEMSD · Vol 22, No 6 · 2026Research

Ranking, Not Point Estimates: Risk Tiering and the Case for AI-Assisted Loss Data in Caribbean SIDS Credit

Data Analyst, Junior Professional Officer, Department of Economics
Caribbean Development Bank
Barbados
Chief Risk Officer, Office of Risk Management
Caribbean Development Bank
Barbados
Received: 14 July 2026Revised: 26 September 2026Accepted: 22 October 2026Published: 6 November 2026
Purpose

To examine what physical risk information remains identifiable for credit in Caribbean Small Island Developing States (SIDS), where hazard data are rich but loss records scarce.

Design/Methodology/Approach

Using storm tracks and four damage-function calibrations, we assess Caribbean risk rankings through Monte Carlo simulation, stochastic dominance and independent records, and compare Caribbean and United States wind-loss relationships using wild cluster bootstrap inference.

Findings

Territory tiering is identifiable and broadly stable across damage-function choice, whereas point magnitudes remain imprecise under sparse Caribbean loss records.

Original/Value of the Paper

We identify an ordinal-cardinal boundary in Caribbean SIDS: risk tiering supports screening today, while precise loss estimates for pricing require better records that artificial intelligence (AI)-assisted methods may help develop.

Research Limitations/Implications

Territory tiering can support risk screening, while data limitations motivate further research on AI-assisted loss-data generation for finer pricing.

Keywords
Credit Risk ManagementSIDSClimate FinanceClimate RiskData ScarcityEconomic LossesCaribbean
Citation

Jia, X. and Capodagli, S. (2026): Ranking, Not Point Estimates: Risk Tiering and the Case for AI-Assisted Loss Data in Caribbean SIDS Credit. World Journal of Entrepreneurship, Management and Sustainable Development (WJEMSD), Vol. 22, No. 6, pp. 585-600.