The CCRIF SPC (formerly called the Caribbean Catastrophe Risk Insurance Facility) has added the Government of Guatemala to the Facility, taking the total number of member countries to 22.
After the signing of a Memorandum of Understanding (MoU) with the Council of Ministers of Finance of Central America, Panama and the Dominican Republic in 2015, which enabled Central American countries to join the parametric risk transfer Facility, Guatemala becomes the third country from the region to join, after Nicaragua in 2015 and also Panama.
Through the Facility, Guatemala has purchased parametric insurance protection for excess rainfall for the 2019/2020 policy year.
For poorer, more vulnerable parts of the world, parametric insurance serves as a vital risk transfer mechanism, enabling rapid payout post-event so that rebuilding and recovery can start as soon as possible, thus limiting the financial impact on societies and economies.
Under a parametric policy, payouts are triggered once predetermined parameters have been met, such as an amount of rainfall or the wind speed of a hurricane.
Established in 2007, initially, the CCRIF SPC was designed for Caribbean governments, of which there are now 19 member countries. However, the MoU signed in 2015 opened the doors for more vulnerable countries to take advantage of needed risk transfer solutions that protect against adverse and extreme weather events.
Since its inception, the CCRIF SPC has made 41 payouts totalling $152 million to member governments. Most recently, the Facility made two payments totalling $12.8 million to the Bahamian government as a result of damage caused by Hurricane Dorian. And, earlier this month, the CCRIF SPC made a payment to the Government of Trinidad and Tobago on its excess rainfall policy following Tropical Cyclone Karen.
Currently, the Facility offers parametric insurance protection for tropical cyclones, earthquakes, and excess rainfall. However, a recent MoU signed by the Caribbean Regional Fisheries Mechanism (CRFM) and the CCRIF SPC, is expected to facilitate the finalisation of a sovereign parametric insurance solution for both the fisheries and aquaculture sectors in the region.
Isaac Anthony, Chief Executive Officer (CEO) of the CCRIF SPC, commented: “CCRIF was not designed to cover all losses on the ground, but rather to provide a quick injection of liquidity following a natural disaster for emergency relief and early recovery needs, thereby reducing post-disaster resource deficits and government budget volatility.
“It is within this context that CCRIF remains committed to its goals of scaling up, which would allow for increasing membership as well as increasing the coverage level of existing members and the development of new products and services for its current and prospective members, thereby supporting countries’ overall objectives of advancing their sustainable development prospects.
“With respect to new products, in July of this year, CCRIF, in collaboration with the World Bank and the US State Department, introduced coverage for the fisheries sector for two member countries – Saint Lucia and Grenada,” added Anthony.
“This product was developed under the Caribbean Oceans and Aquaculture Sustainability FaciliTy (COAST) initiative and provides coverage for fisherfolk and other players in the fisheries industry. The COAST product will be offered to other countries in the near future. Also, the Facility is developing products for drought, agriculture and public utilities – all with the goal of meeting the demand of current and prospective members in both the Caribbean and Central America.”
