The CCRIF SPC (formerly known as the Caribbean Catastrophe Risk Insurance Facility) has launched a new set of web-based tools that will provide its members with greater visibility of the real-time data used as inputs to their parametric catastrophe insurance policy triggers.
The CCRIF SPC has been steadily innovating to increase its members understanding of the parametric catastrophe risk transfer coverage it provides, as well as launching new products and seeking to further expand its growing risk pool.
The CCRIF SPC’s parametric disaster risk pool is now nearing $1 billion of coverage limit, helping its members to benefit from increasing reinsurance synergies from the increased size and diversification in the pool.
Encouraging greater uptake of parametric insurance coverage will help to grow the risk pool further over time, so the CCRIF SPC is offering greater transparency into the data inputs that feed its parametric triggers to help members gain a better understanding of its coverage range.
A suite of four web-based real-time data tools will enable CCRIF members to monitor earthquakes, the development of potentially damaging heavy rainfall and tropical cyclones. Allowing them to analyse the intensity of impending catastrophe events and assess their impact.
Importantly, the web-based tools will also allow CCRIF members to check whether an active parametric insurance policy through the facility is likely to be triggered.
Three tools, for earthquakes, tropical cyclones and excess rainfall, monitor actual data, while the fourth is a Real-Time Forecasting System that shows the expected future development of active tropical cyclones.
Dubbed the Web Monitoring Application or WeMAp, the tools are all based on the latest catastrophe risk model used by the CCRIF, the SPHERA model, which underpins CCRIF’s tropical cyclone and earthquake parametric insurance policies and also the CCRIF Excess Rainfall (XSR) 2.5 model, which underpins its excess rainfall policies.
Education on the benefits of parametric insurance, reinsurance and risk transfer is still lacking, as we recently explained in this article.
The CCRIF explains that the new web-based data services will, “play a key role in enhancing the understanding and interpretation of CCRIF insurance policies and their associated outputs.”
CCRIF CEO, Mr. Isaac Anthony, commented, “I am very pleased that we are able to launch this tool which would add another layer of transparency in terms of the models used to underpin CCRIF’s policies, enabling members to see firsthand how the models work in the context of their policy parameters and an event happening on the ground.
“WeMAp is among several initiatives that the Facility has been providing to build capacity among our 21 member governments in disaster risk management and financing.”
Importantly, the tools will allow the covered member governments’ Ministries of Finance, which are largely the CCRIF’s policyholders, to view modelled loss values for their country for an active catastrophe event for which they have a CCRIF insurance policy.
This will allow them to compare the loss values of the event to their policy, so providing greater clarity into whether their CCRIF policy parameters are likely to be triggered by the event.
Initiatives such as this can only assist in giving government’s increased confidence in the CCRIF parametric insurance offering.
Some other parametric risk transfer product offerings also offer monitoring of real-time conditions, but the majority still remain relatively opaque, some even with relatively long calculation periods before a triggering event can be confirmed.
Speeding these processes and enhancing access to data can only help to increase the uptake of parametric risk transfer products.
We expect to see more parametric solutions offering real-time visibility of trigger inputs in parametric insurance and reinsurance products going forwards.
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