Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC) has announced that all member governments in the Caribbean have renewed their parametric insurance coverage ahead of the upcoming 2021 Atlantic Hurricane Season.
This is the second year in a row that members have ceded over US$1 billion in risk to CCRIF, as the United States National Oceanic and Atmospheric Administration (NOAA) predicts another above-normal Atlantic hurricane season, although it does not anticipate the historic level of storm activity of 2020.
Acting as a risk pooling facility, the CCRIF provides Caribbean and Central American countries with parametric disaster insurance, covering tropical storms, earthquakes, excess rainfall, among others.
With the 2020 Atlantic hurricane season now officially underway, the CCRIF has revealed that all of its member governments in the Caribbean have renewed their parametric policies for tropical cyclone, excess rainfall, earthquake and fisheries.
CCRIF’s CEO Isaac Anthony commented: “CCRIF continues to offer insurance products not readily available in traditional insurance markets. These parametric insurance products allow governments to have access to liquidity within 14 days of an event.
“This is key as it helps governments reduce budget volatility after a natural disaster, support the most vulnerable in their population and begin the process of recovery in short order.”
In 2020, the European Union under its Global COVID-19 Response, provided a grant of €10 million (US$12 million) to CCRIF for premium support or for increasing coverage for its Caribbean members. This financial assistance was channeled through the EU Regional Resilience Building Facility managed by the Global Facility for Disaster Reduction and Recovery (GFDRR).
This grant provided to each Caribbean member country a 26% discount on total gross premium or an increase in policy coverage under their CCRIF parametric insurance policies. Indeed, many members utilised a portion of the discount in the 2020/21 policy year, leaving a portion for use during this current policy year.
This year, the EU has provided additional financial support of €262,000 (US$317,000) through the €3,000,000 Technical Assistance Program for Disaster Risk Financing in Caribbean Overseas Countries and Territories (OCTs).
The World Bank provided premium support to pilot countries Grenada and Saint Lucia for a third year for their 2021/22 COAST policies for the fisheries sector, which were first offered in 2019.
During the 2020 hurricane season, CCRIF made 8 payouts due to tropical cyclones Cristobal, Laura, Zeta, Eta and Iota totalling US$48 million to 6 member governments on their tropical cyclone and/or excess rainfall policies.
Since the Facility’s inception in 2007, it has made a total of 50 payouts to 16 of its member governments, totalling approximately US$200 million, all within 14 days of the event.
