Regional company to add drought, fisheries insurance

Wednesday, April 11, 2018

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Provider of earthquake, hurricane and excess rainfall insurance to countries in the region, CCRIF, has plans to add drought coverage to its portfolio of products and intends to widen its clientèle to include sectors such as agriculture and fisheries, renewable and traditional utilities, and tourism.

The proposed move, which the facility said would form part of its strategic direction to 2030, also features improved coverage for existing members, and the introduction of a micro insurance product called Livelihood Protection Policy that is expected to protect low-income groups against climate risk.

The suggestions were mooted at a stakeholder retreat as part of the organisation's 10th anniversary celebration in Miami on March 19 and 20, and were made public via a statement to the press on Monday. They are also listed in CCRIF's annual report for 2016/2017.

“The facility is exploring scaling up to better serve the countries in the region...and will lead towards CCRIF playing its part in helping our region realise Caricom's stated ambition of making the Caribbean the first climate-resilient zone in the world,” CCRIF CEO Isaac Anthony said the statement.

Formerly known as the Caribbean Catastrophe Risk Insurance Facility, CCRIF is the world's first regional fund utilising parametric insurance, providing short-term liquidity when a parametric insurance policy is triggered. It currently has 17 member countries from the Caribbean and Central America. Up to December 2017, the facility had paid out some US$130.5 million to member states, US$55 million of which was paid out in 2017 due to the damage wrought in nine countries by hurricanes Maria and Irma.

“During CCRIF's 10 years in existence, the facility has demonstrated that disaster risk insurance can effectively provide a level of financial protection for countries vulnerable to tropical cyclones, earthquakes and excess rainfall. Left unchecked, the economic impact of disasters can generate large losses that disrupt long-run economic growth trajectories.

“[Therefore] charting a course to 2030 is an even more urgent requirement as the impacts of climate change are increasingly affecting CCRIF's Caribbean and Central American member countries,” said Anthony.

For the financial year ended May 31, 2017, CCRIF SPC had total assets of US$120,118,226 with total liabilities standing at US$19,602,620. Over the same period, the facility sold 39 policies at an aggregate value of US$29.2 million.

Even with the payouts, CCRIF said, it “remains financially solvent with its long-term sustainability intact”.

CCRIF was capitalised through contributions to a Multi-Donor Trust Fund (MDTF) 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.

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