The Caribbean Catastrophe Risk Insurance Facility (CCRIF SPC) has continued to expand access to parametric insurance in Central America by welcoming Honduras as its fourth member from the region.
According to CCRIF, the Honduran government has purchased parametric insurance coverage for excess rainfall, effective from 1 June 2023.
CCRIF CEO Isaac Anthony, commented, “I am happy to welcome Honduras to CCRIF and look forward to continuing to engage with the Government as it accesses CCRIF parametric insurance as an effective means of closing the protection gap and strengthening the country’s public financial management framework.
“Access to excess rainfall insurance will allow the Government the flexibility to begin recovery efforts immediately following a natural disaster as payouts received within 14 days of an event can be used to address the country’s most urgent needs, including helping vulnerable populations or rehabilitating critical infrastructure among other areas.”
Meanwhile, the Ministry of Finance of the Republic of Honduras (SEFIN) issued the following statement, “The Government Plan of President Xiomara Castro underscores the urgency of enacting public policies focused on disaster protection, prevention, and planning. Such policies are designed to ensure the resilience of our population, as well as bolster the infrastructure and resources to confront the growing severity and frequency of natural hazard events.
“Through the recently signed agreement with CCRIF, our goal is to continue strengthening Honduras public finances and its capacity to respond to and recover from disasters, without forgetting the enhancement of institutional capacity to effectively manage a resilient and inclusive recovery and reconstruction process.”
Honduras’ entry and participation in CCRIF was supported by the Central America and Caribbean Catastrophe Risk Insurance Program Multi-Donor Trust Fund (MDTF), administered by the World Bank. The MDTF offers benefits such as financing a country’s Participation Fee, which CCRIF said is a requirement for prospective members to join the Facility.
CCRIF membership now stands at 26: 19 Caribbean governments, 4 Central American governments, and 3 Caribbean electric utility companies. GRENLEC, Grenada’s electric utility, also joined CCRIF in 2023.
Currently, the Facility offers parametric insurance policies for tropical cyclones, excess rainfall, and earthquakes and for the fisheries and electric utilities sectors. CRIF noted that in the last four years, its members have been routinely ceding over $1 billion in insurance coverage to CCRIF.
“They recognize 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,” the Facility concluded.
