The Caribbean Catastrophe Risk Insurance Facility (CCRIF) has announced that its members renewed their parametric insurance policies at June 1, while GRENLEC, Grenada’s electric utility company, also purchased coverage for the first time.
According to CCRIF, June 1 2023 marked 16 years since Caribbean governments began purchasing CCRIF parametric insurance coverage as a means of financially protecting their economies from hurricanes, earthquakes, and excess rainfall events.
“Member governments in the Caribbean and Central America are now routinely ceding over $1bn in insurance coverage to CCRIF, recognizing that the frequency and intensity of natural hazards are increasing, and although mortality resulting from disasters seems to be decreasing, economic costs are rising precipitously,” CCRIF explained.
For the 2023/24 policy year, CCRIF member governments purchased a total of 66 policies. Tropical Cyclone accounted for 22 policies, Excess Rainfall for 24 policies, Earthquake for 15 policies, COAST (fisheries) for 2 policies, and Caribbean Electric Utilities for 3 policies.
Between March and May, CCRIF said it utilised a range of member meetings to discuss policy renewals. This year, the Facility introduced three new features.
Outlining these, CCRIF said, “The updated SPHERA model for Tropical Cyclone includes a new policy endorsement for localized events called the Localized Damage Index (LDI) for tropical cyclone events where losses are highly concentrated in small sections of the country.
“The Excess Rainfall model has been upgraded from the current XSR 2.5 model to XSR 3.0 and includes two policy endorsements: the “wet season trigger” (WST), which introduces the ability to detect excess rainfall events that occur when the soil is saturated, and the “localized event trigger” (LET) for extreme localized events.
“These policy endorsements represent an enhancement of the models for TC and XSR and do not rectify any deficiency in the current models.”
As per CCRIF, the endorsements are aimed at improving its ability to identify and provide coverage for tropical cyclone and rainfall events that occur under very specific conditions that contribute to the negative impacts from the event.
Since the Facility’s inception in 2007, it has made 60 payouts totalling $261.8m to 16 member governments.
