The Caribbean Catastrophe Risk Insurance Facility (CCRIF) has received funding for the 2009 hurricane season from the European Union. The EU has put forwards €12.5m to help shore up the fund in case of a disaster and allow it to pay claims more easily. The cat facilities reserve pool now consists of many entities including governments such as the World Bank, Canada, UK, Bermuda, France, Ireland and the Caribbean Development Bank.
Last year the fund only paid out for one hurricane event (Ike) to the Turks & Caicos ($6.3m) despite it being an extremely active year. This led to calls for the fund to change the way it’s cover is structured and triggered so that it covers countries in the event of damaging tropical storms where wind speed may not meet the current claims threshold but damage caused by flooding and mud slides still devastates. We have yet to hear of any further changes to the CCRIF offering which leaves the door open for private reinsurers to seek to fill the cover gaps. Perhaps a micro-insurance effort in the Caribbean is required to provide a way for locals to at the least cover their livelihoods in the event of less severe storms?