A Mexican government backed $14 million grant has been approved by the Caribbean Development Bank (CDB) to provide the Caribbean Catastrophe Risk Insurance Facility, (CCRIF SPC) member countries with enhanced insurance cover.
The grant provides cover that protects against tropical cyclone, earthquake and excess rainfall risks as well as contributes to the facility’s long-term sustainability through increased reserves.
Cheryl Dixon, Coordinator, Environmental Sustainability Unit, CDB said; “the Bank, through the approval of this grant, is pleased to reaffirm its commitment and support for CCRIF SPC.
“We view the adoption of risk transfer mechanisms such as that offered by CCRIF as an important element of our Borrowing Member Countries’ disaster risk management work programme.”
The Government of Mexico funded the grant to the CDB’s Special Development Fund in line with the joint declaration from the Third CARICOM-Mexico Summit, Yucatan, April 29, 2014, where the Government of Mexico agreed to support and strengthen the CCRIF.
“The grant will contribute capital to the Tropical Cyclone and Earthquake Segregated and Excess Rainfall Segregated Portfolios under CCRIF and support the development of new products,” said Dixon.
CCRIF provides parametric insurance coverage for government risk to Caribbean and Central American countries to limit the financial impact to governments of catastrophic natural events by quickly providing short-term liquidity when a policy is triggered.
Parts of the Caribbean were recently devastated by hurricanes Irma and Maria. The storm resulted in many deaths and injuries, and widespread damage was reported on numerous Caribbean islands.
Reinsurance companies that operate in the Caribbean have been telling regional insurers to expect higher rates when they look to renew their reinsurance programmes, as a result of recent hurricanes in the region, according to the Association of Trinidad and Tobago Insurance Companies (ATTIC), so the grant comes at an imperative time for disaster-struck Caribbean governments.
