The Caribbean Catastrophe Risk Insurance Facility (CCRIF), the non-profit multi-country catastrophe risk pooling facility who provide parametric based disaster insurance cover to Caribbean countries, have announced that all 16 of their member countries have renewed their policies for the 2012-2013 year. Cover provided by the CCRIF since 2007 includes hurricane and earthquake cover, both of which trigger on a parametric basis, an excess rainfall product is due to be rolled out about now.
The 16 members have all benefitted from a policy rebate equal to 25% of the policy premium paid in the previous year. This is thanks to the 2011 policy year being quite with no policies triggered by hurricanes or earthquakes. Mr. Isaac Anthony, Permanent Secretary in Saint Lucia’s Ministry of Finance, Economic Affairs and National Development and CCRIF Board Member, said; “This initiative provides a tangible benefit to CCRIF’s members if payouts during the prior year result in a significant underwriting profit, while fully maintaining CCRIF’s sound financial position and its unparalleled ability to pay the claims of its members.” The 16 member countries are encouraged to invest the policy rebate in either a greater level of cover or to implement programmes for improving hazard risk resilience or to counter climate change with the aim of reducing the impact of natural hazards.
The CCRIF adds an excess rainfall product to its offering this year, according to the latest release. This product will cover excess rainfall events which are not included in hurricane policies (hurricane policies are triggered by wind and storm surge). It will also provide some cover for tropical storms which do not trigger the policy due to wind speeds not reaching the parametric trigger point. The excess rainfall policy was due to have launched and begun rollout this month (June), but the latest release from the CCRIF does not make it clear if it is on schedule or not.
Since its launch in 2007 the CCRIF has made eight payouts, three for earthquake policies and five for hurricanes, totalling $32,179,470 to seven member governments. All payments were transferred to the respective governments within less than a month, and sometimes even a week, of the event occurring. Herein lies the benefit of disaster insurance facilities which are parametrically triggered; the countries can benefit from a source of capital promptly after an event occurs to assist with recovery and rebuilding.