The CCRIF SPC (formerly known as the Caribbean Catastrophic Risk Insurance Facility) has said that at the renewals of its clients policies in advance of the 2021 Atlantic hurricane season, more than $1 billion of risk has been ceded to the facility through parametric risk transfer arrangements.
It’s the second year running where member countries have ceded over $1 billion of risk to the CCRIF, as uptake of the parametric risk transfer products on offer continues to be high and the facilities risk pool continues to expand.
Expansion of the risk pool relies on reinsurance capital to underpin it, with the CCRIF having renewed a program with a panel of global reinsurance companies to support its delivery of parametric insurance to regional governments and now non-governments as well.
In fact, the first non-government member of the CCRIF, the Anguilla Electricity Company Limited (ANGLEC) which was the first to purchase its new parametric insurance product for electrical utilities, has increased its coverage for the coming hurricane season.
At this year’s renewal, in advance of the hurricane season, the CCRIF has renewed five parametric insurance products across 23 members (19 Caribbean governments, 3 Central American governments and 1 electric utility).
Isaac Anthony, CEO of the CCRIF, commented on the renewals saying, “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.”
Government’s benefiting from CCRIF coverage had been hit hard by thee COVID-19 pandemic over the last year and a half, but have been able to continue their coverage thanks to donor funds that were split across last year and this year’s renewals.
CCRIF demonstrated the value of parametric risk transfer, risk pooling and access to global reinsurance market’s during 2020’s busy hurricane season.
During the 2020 hurricane season, CCRIF made 8 payouts for tropical cyclones Cristobal, Laura, Zeta, Eta and Iota.
In total that amounted to US $48 million paid to 6 member governments, against their parametric tropical cyclone and/or excess rainfall policies.
Since its launch in 2007, CCRIF has now made a total of 50 payouts to 16 of its member governments, amounting to roughly US $200 million.
Every one of these payouts has been made within 14 days of the event, one of the CCRIF’s very important distinctions, in having honed its modelled response to catastrophe events in order to make payouts particularly quickly.