CCRIF Members Renew Parametric Coverage Ahead of Hurricane Season

CCRIF SPC's member governments renewed their parametric insurance coverage for tropical cyclones, excess rainfall, earthquakes, and the fisheries sector in advance of this year's Atlantic hurricane season.

According to a statement from CCRIF, this was the second straight year that members ceded more than $1 billion in risk to CCRIF.

Forecasters have predicted another above-average North Atlantic hurricane season this year, although not as severe as 2020's record-setting season.

CCRIF started operations in 2007 with 16 Caribbean member governments and just under $500 million in coverage for tropical cyclones and earthquakes. Fourteen years later, CCRIF now offers five parametric insurance products to 23 members (19 Caribbean governments, three Central American governments, and one electric utility).

"CCRIF continues to offer insurance products not readily available in traditional insurance markets," CCRIF's CEO Isaac Anthony said in a statement. "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."

During the 2020 hurricane season, CCRIF made eight payouts due to tropical cyclones Cristobal, Laura, Zeta, Eta, and Iota totaling $48 million to six member governments on their tropical cyclone and/or excess rainfall policies. Since the facility's inception in 2007, it has made a total of 50 payouts to 16 of its member governments, totaling approximately $200 million.

Previously known as the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company, CCRIF SPC is a segregated portfolio company that is owned, operated, and registered in the Caribbean. It limits the financial impact of such disasters as catastrophic hurricanes, earthquakes, and excess rainfall events on the Caribbean and Central American governments by quickly providing short-term liquidity when a parametric insurance policy is triggered.

CCRIF SPC was developed under the technical leadership of the World Bank and with a grant from the government of Japan. It was capitalized through contributions to a multidonor trust fund by the government of Canada, the European Union, the World Bank, the governments of the United Kingdom and France, the Caribbean Development Bank, and the governments of Ireland and Bermuda as well as through membership fees paid by participating governments.