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GRAND CAYMAN, Cayman Islands (CMC) — The Caribbean Catastrophic Risk Insurance Facility (CCRIF SPC) on Monday said that its member governments have renewed their parametric insurance coverage for tropical cyclones, excess rainfall, earthquakes, and the fisheries sector ahead of the 2021 Atlantic Hurricane Season.
It said that this is the second consecutive year that members have ceded over one billion US dollars in risk to CCRIF.
“CCRIF continues to offer insurance products not readily available in traditional insurance markets. These parametric insurance products allow governments to have access to liquidity within 14 days of an event. This is key as it helps governments reduce budget volatility after a natural disaster, support the most vulnerable in their population and begin the process of recovery in short order,” said CCRIF SPC chief executive officer, Isaac Anthony.
The facility’s first non-government member, ANGLEC – Anguilla’s electric utility company – not only renewed, but increased its coverage. ANGLEC joined CCRIF in 2020, purchasing the newest product that offers coverage for electric transmission and distribution systems.
CCRIF, which started operations in 2007 with 16 Caribbean member governments and just under US$500 million in coverage for tropical cyclones and earthquakes, now offers five parametric insurance products to 23 members, including nine Caribbean governments, three Central American governments and one electric utility.
“CCRIF’s members continue to grapple with the socioeconomic challenges brought about by COVID-19 and are well aware that a natural disaster can further impact their recovery, which is being projected to be slow and may last until 2024 by some estimates,” CCRIF SPC said in a statement.
Anthony thanked development partners who early in the pandemic stepped forward to support member governments to help offset their policy premiums for 2020/21 and 2021/22.
He said grants provided by development partners, including the European Union and the Government of Canada, were most welcomed by members given the fiscal challenges they continue to face. The flexibility in the use of the funds was also well received by members, as they were able to use a portion of the funds during the last policy year and a portion for this current policy year.
In 2020, the European Union (EU) under its Global COVID-19 Response, provided a grant of €10 million (US$12 million) to CCRIF for premium support or for increasing coverage for its Caribbean members.
This year, the EU has provided additional financial support of Euro 262,000 (One Euro=US$.1.29 cents) through the three million Euros Technical Assistance Programme for Disaster Risk Financing in Caribbean Overseas Countries and Territories (OCTs), for the delivery of training activities to selected OCTs to better understand CCRIF products and services.
Also, nine Caribbean countries – seven current CCRIF members – benefitted from a total of US$12.4 million under the Canada-CARICOM Climate Adaptation Fund.
They are Antigua and Barbuda, Belize, Dominica, Grenada, Jamaica, Saint Lucia, and St Vincent and the Grenadines. These countries were able to use their allocation to cover a portion of their premium costs for their CCRIF parametric insurance policies for policy year 2020/21 and/or 2021/22.
Two countries – Guyana and Suriname – which are not yet members of CCRIF – would be able to use their allocations towards their participation fees as well as for premium support when they join the Facility.
The World Bank provided premium support to pilot countries Grenada and St Lucia for a third year for their 2021/22 COAST policies for the fisheries sector, which were first offered in 2019.
CCRIF SPC said that the United States National Oceanic and Atmospheric Administration (NOAA) is predicting another above-normal Atlantic hurricane season, although it does not anticipate the historic level of storm activity of 2020.
“As the 2021 Atlantic Hurricane Season begins, CCRIF’s members are assured that they are covered for another year against tropical cyclones and excess rainfall events which can occur during a hurricane or tropical storm or any rain system throughout the year as well as earthquakes that may occur at any time. “
CCRIF’ said its Central American members also received special benefits as part of the Facility’s response to the COVID-19 pandemic.
CCRIF was formed as the first multi-country risk pool in the world and was the first insurance instrument to successfully develop parametric insurance policies for natural catastrophes.
