The CCRIF SPC (formerly known as the Caribbean Catastrophic Risk Insurance Facility) has announced that all member governments in the Caribbean have renewed their parametric insurance coverage ahead of the 2020 Atlantic hurricane season, increasing the size of the pool by eight per cent to more than $1 billion.
Acting as a risk pooling facility, the CCRIF provides Caribbean and Central American countries with parametric disaster insurance, covering tropical storms, earthquakes, excess rainfall, among others.
With the 2020 Atlantic hurricane season now officially underway, the CCRIF has revealed that all of its member governments in the Caribbean have renewed their parametric policies for tropical cyclones, excess rainfall, earthquake and fisheries.
In total, member countries ceded more than $1 billion in risk to the CCRIF, which represents an increase in overall coverage of eight per cent.
Numerous forecasters have said that there’s likely to be an above-average level of hurricane activity this year, but by securing this coverage, Caribbean countries have assurances that they are protected for the year ahead.
So far, the CCRIF has made 41 payouts totalling $152 million to 13 of its 22 member countries, all within 14 days of the event. This rapid disbursement of funds post-event is a key benefit of parametric insurance, with payouts triggered when predetermined parameters have been met, such as an amount of rainfall at a specific location, removing the need for on-site loss assessment.
In addition to the successful renewal, the CCRIF has announced that in an effort to support governments in the Caribbean whose social and economic sectors have been significantly impacted by the COVID-19 pandemic, the EU through its Global COVID-19 Response, has provided a grant of €10 million to the organisation for premium support, or for expanding coverage for its members in the region.
The grant is channelled through the EU Regional Resilience Building Facility, managed by the Global Facility for Disaster Reduction and Recovery and the World Bank.
Specifically, the EU grant that is available to each member country in the Caribbean would provide at least a 26 per cent discount on total gross premium, or an increase in policy coverage under the parametric insurance policies the CCRIF provides. The CCRIF notes that this is in addition to the discounts that it already offers on gross premium.
Daniela Tramacere, EU Ambassador to Barbados, the Eastern Caribbean States, OECS and CARICOM/CARIFORUM, commented: “Mitigation of COVID-19 impacts ahead of the hurricane season that already started in the region requires extraordinary and coordinated measures. The EU is strongly committed to stand together with its partners in the Caribbean, providing emergency support and participating in the social/economic recovery process. The €10 million support has been provided to CCRIF SPC to ease payment of member countries’ premiums and improve their risk coverage against natural hazards.”
According to the CCRIF, member countries can decide to utilise the EU-funded discount during the 2020-2021 and 2021-2022 policy years.
CCRIF Chief Executive Officer (CEO), Isaac Anthony, said: “I must use this medium to openly thank the European Union for its rapid response in support of our member countries at a time when they are grappling with significantly diminished financial resources due to the economic crisis posed by COVID-19. I also take the opportunity to thank the GFDRR and the World Bank for facilitating this timely assistance to Caribbean countries as part of their wider response to the COVID-19 crisis in the region.
“The truth is what we do at CCRIF is about supporting governments to help their populations – communities, businesses and key sectors such as education, agriculture, and tourism. An assessment of the beneficiaries of CCRIF’s payouts show that over 2.5 million persons in the Caribbean and Central America have benefited directly and/or indirectly from these payouts after a natural disaster.”