All 16 member countries of the Caribbean Catastrophe Risk Insurance Facility (CCRIF) have renewed their policies with the hurricane and earthquake insurance pool. Member governments have been able to take advantage of effectively a 10% decrease in premiums due to receiving more cover for the same premium as last year. By pooling their risk the Caribbean member nations are able to reduce their premiums for this kind of catastrophe insurance cover by around 40%. The World Bank has helped the CCRIF to provide premium financing for some participants as they were struggling to afford it due to the global financial situation.
The facility which is set up to pay out under specific catastrophic weather conditions has it’s critics though (as evidenced by this article on the Cayman News Service), especially given it has failed to pay out at times when specific triggers have not been met even though a country has faced severe losses (last year’s hurricane Paloma being a good example). It provides an essential backstop which would not be affordable by these countries through traditional re/insurance although it could perhaps be broadened to provide at least some financial recompense when conditions do not meet the strict trigger rules.