The Caribbean Catastrophic Risk Insurance Facility (CCRIF SPC) 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 is the second consecutive year that members have ceded over US$1 billion in risk to CCRIF.
Isaac Anthony, chief executive officer of the Cayman-based segregated portfolio company, said 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,” he said.
The facility’s first non-government member, Anguilla’s electricity company ANGLEC, increased its coverage after joining CCRIF in 2020. ANGLEC has purchased 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 utility company.
“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 said.
Last year CCRIF made eight payouts due to tropical cyclones Cristobal, Laura, Zeta, Eta and Iota totalling US$48 million to six member governments on their tropical cyclone 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, totalling approximately US$200 million.