The Caribbean Development Bank (CDB) has approved a grant of USD14 million to CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility). CCRIF provides parametric insurance coverage for government risk to Caribbean and Central American countries. This form of insurance is designed to limit the financial impact of catastrophic natural events, such as hurricanes and earthquakes, by quickly providing short-term liquidity when a policy is triggered.
The grant will provide enhanced insurance coverage to the Bank’s Borrowing Member Countries (BMCs) that insure through CCRIF against tropical cyclone, earthquake and excess rainfall risks. The funding will also enable CCRIF SPC to increase its reserves and capital, helping its long-term sustainability.
Cheryl Dixon, Coordinator, Environmental Sustainability Unit, CDB noted, “The Bank, through the approval of this grant, is pleased to reaffirm its commitment and support for CCRIF SPC. We view the adoption of risk transfer mechanisms such as that offered by CCRIF as an important element of our Borrowing Member Countries’ disaster risk management work programme.”
“The grant will contribute capital to the Tropical Cyclone and Earthquake Segregated and Excess Rainfall Segregated Portfolios under CCRIF and support the development of new products,” Dixon added.
The grant is funded through resources provided to CDB’s Special Development Fund (Other) by the Government of Mexico. This contribution is in keeping with the joint declaration from the Third CARICOM-Mexico Summit, Yucatan, April 29, 2014, where the Government of Mexico agreed to support and strengthen the CCRIF. The intervention is consistent with the Bank’s Strategic Plan 2015-2019. It also aligns with CDB’s Climate Resilience Strategy and Disaster Management Strategy and Operational Guidelines.
Between 2007 and September 2017, CCRIF SPC disbursed USD119.15 mn to Caribbean countries. After the passage of Hurricanes Irma and Maria in September, CCRIF SPC made payouts of USD50.7 mn to seven countries: Anguilla, Antigua and Barbuda, The Bahamas, Dominica, Haiti, St. Kitts and Nevis, and the Turks and Caicos Islands.