The Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC) has announced the launch of its newest parametric insurance product, developed for the electric utility sector in the Caribbean.
The electric utilities product aims to limit the financial impact of tropical cyclones by providing financial liquidity to electric utility companies when a policy is triggered.
The product will be limited to covering direct damage to the transmission and distribution (T&D) components of the electric power system due to impacts of wind.
One of the issues faced by most electric utilities in the Caribbean is the inability to purchase traditional indemnity insurance for overhead T&D systems because of the very limited availability and uneconomical pricing.
By launching this product, CCRIF has expanded coverage to non- sovereigns and to the private sector.
The organisation currently provides parametric insurance coverage for tropical cyclones, earthquakes, excess rainfall, and the fisheries sector to 19 governments in the Caribbean and 3 in Central America.
According to CCRIF Chief Executive Officer, Isaac Anthony, “The development of this product is part of the scaling-up plans of CCRIF, which has as one area of focus the expansion of the Facility’s product offerings, an example of which is to address the needs of the electric utility sector in the Caribbean.”
The development of the utilities product was undertaken in close collaboration with the he Caribbean Electric Utility Services Corporation (CARILEC), an association of electric utilities, suppliers, manufacturers and other stakeholder operations in the electricity industry in the Caribbean where 35 of its members are electric utilities.
Executive Director of CARILEC Dr. Cletus Bertin, added, “The role of electricity in the economic and social life of the region is pivotal. This product is not just for the electric utilities sector.
“It is for the development of the region in terms of the economic and social life of the people, who are dependent on tourism as well as agri-business, light manufacturing, etc., which are all reliant on the steady supply of electricity.
“The product speaks to a broader agenda: our ability to bounce back quickly after a disaster and generate economic activity through the provision of electricity to the industrial and commercial sector.”