The European Union has provided $4.7 million to members of the Caribbean Catastrophe Risk Insurance Facility (CCRIF) to subsidise its 2023 parametric insurance program.
Provided through a programme administered by the World Bank, the EU funds enabled CCRIF to provide discounts of approximately 14% on the gross premium of members’ tropical cyclone and excess rainfall policies.
Members include Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Haiti, Jamaica, St. Kitts & Nevis, Saint Lucia, St. Vincent & the Grenadines, The Bahamas, and Trinidad and Tobago.
The EU funds also enable technical assistance oriented towards ensuring the sustainability of climate and disaster risk insurance in the years to come.
CCRIF CEO, Isaac Anthony, thanked the EU for its continuous support and reiterated the importance of contributions of the donor community. He commented: “The success of CCRIF is undoubtedly due in part to the support – both technical and financial – that we receive from our development partners.
“This support from the EU continues to be key to allowing us to meet the needs of our current and potential members. It allows us to make available more affordable insurance coverage to our members, to improve the long-term sustainability of CCRIF, and to develop new products for additional perils and sectors.”
The latest figure contributes to the $49 million in grant support the EU has provided to assist Caribbean countries since 2007, when the CCRIF was established.
The EU contributed to the initial capitalization of CCRIF, the entry of new countries, and the development of new parametric insurance products through technical assistance as well as support to respond to the significant disruption of Caribbean economies as a consequence of the COVID-19 pandemic.
During 2020-2022, the EU support was managed in coordination with the EU Caribbean Regional Resilience Building Facility administered by the World Bank’s Global Facility for Disaster Reduction and Recovery (GFDRR).
This support provided each Caribbean CCRIF member country with premium discounts or increases in policy coverage. During the past three years (2020/21 to 2022/23) several CCRIF member countries used this funding to increase tropical cyclone and/or excess rainfall coverage.
Head of the EU Delegation to Barbados, the Eastern Caribbean States, the OECS and CARICOM/CARIFORUM, Malgorzata Wasilewska, said: “The renewal of countries’ catastrophe risk insurance policies at this time signals the growing strategic importance placed on disaster risk financing as key to advancing sustainable development prospects in the context of shrinking fiscal space. We are proud to say that the EU contribution supported important milestones in this regard.”
She also added that: “Recent and past support from the EU to CCRIF was adequate to ease payment of member countries’ premiums and improve their risk coverage against natural hazards. However, the global context calls for constant search for innovative solutions to allow the successful facility to grow accordingly. The EU is partnering with CCRIF to focus on sel-fsustainable mechanisms allowing for progress in the region, while keeping this valuable tool at the service of the countries.”
CCRIF currently offers five parametric insurance products: earthquake, based on modelled losses due to ground shaking; tropical cyclone, based on modelled losses due to wind and storm surge; excess rainfall, based on modelled losses due to the amount of rainfall.
Also, the Caribbean Ocean and Aquaculture Sustainability FaciliTy (COAST) product for the fisheries sector, based on rain, waves, wind and storm surge; and a product for electric utilities, based on losses due to wind for their transmission and distribution lines.
Since its inception, theCCRIF has made 59 payouts totalling $261.4 million to 16 of its member governments – all within 14 days of the triggering of an event.
CCRIF payouts were not designed to cover all losses on the ground but to provide an injection of quick liquidity immediately following a natural catastrophe to allow governments to quickly begin recovery, including supporting the most vulnerable in their populations, the Facility noted.
