Caribbean Catastrophe Risk Insurance Facility (CCRIF SPC)
The Caribbean governments
CCRIF SPC is a not-for-profit risk pooling facility, owned, operated and registered in the Caribbean for Caribbean governments. It offers parametric insurance designed to limit the financial impact of catastrophic tropical cyclones, earthquakes and excess rainfall events on Caribbean governments by quickly providing short-term liquidity when a policy is triggered.
Since its inception in 2007, CCRIF has made 12 payouts totalling US$35,572,474 to 8 member governments (see table below). All payouts were available to be transferred to the respective governments within two weeks after the event and in three cases, interim payments were requested and made one week after the event.
CCRIF policies cover “government loss” as a proportion of the full “national loss”. CCRIF was designed to provide funds within 14 days to assist governments
with immediate needs following a catastrophe event. The exact payout amount is based not only on the modelled losses after a tropical cyclone, earthquake or rainfall event, but also on the terms of the policy selected by the country – the amount of risk transferred to CCRIF and the maximum payout limit.
Regarding CCRIF policies and coverage selection, all countries are required to make three key decisions regarding their coverage selection. These are:
- The selection of an attachment point (the minimum severity of the event loss which gives rise to a payment and therefore is the loss value at which the policy contract is triggered)
- The selection of an exhaustion point (the severity of the event loss at or above which the maximum payment is triggered)
- The selection of the coverage limit (which is tied to the ceding percentage and dictates the premium cost)
CCRIF policies are renewed on June 1st every year and last for one year. Each year, countries have the opportunity to consider their coverage characteristics (deductible and policy limit) and premium level for existing policies as well as obtaining coverage for new perils (for example excess rainfall).
CCRIF was developed under the technical leadership of the World Bank and with a grant from the Government of Japan. It was initially capitalized through contributions to a Multi-Donor Trust Fund by the Government of Canada, the European Union, the World Bank, the governments of the UK and France, the Caribbean Development Bank and the governments of Ireland and Bermuda, as well as through membership fees paid by participating governments.
Insurance is given to members: sixteen governments have been members of CCRIF since its inception in 2007:
Anguilla, Antigua & Barbuda, Bahamas, Barbados, Belize, Bermuda, Cayman Islands, Dominica, Grenada, Haiti, Jamaica, St. Kitts & Nevis, Saint Lucia, St. Vincent & the Grenadines, Trinidad & Tobago and Turks & Caicos Islands.
Soon, CCRIF is expected to expand its membership to include countries in Central America through a partnership with COSEFIN – the Council of Ministers of Finance of Central America, Panama and the Dominican Republic. Also CCRIF is always exploring opportunities to include other Caribbean countries.