CCRIF SPC Makes Its First 2021 Atlantic Hurricane Season Payouts
August 02, 2021
CCRIF SPC has made its first payouts of the 2021 Atlantic hurricane season following July's Hurricane Elsa.
CCRIF made two payouts totaling $2.5 million to the government of Barbados under the country's tropical cyclone and excess rainfall parametric insurance policies.
CCRIF also made $528,512 in payments to three other member governments—Haiti, Saint Lucia, and Saint Vincent and the Grenadines—under the aggregate deductible cover feature of CCRIF's tropical cyclone policies.
Hurricane Elsa was the fifth tropical cyclone in this year's Atlantic hurricane season.
Earlier this year, CCRIF noted that its member governments had renewed their parametric insurance coverage for tropical cyclones, excess rainfall, earthquakes, and the fisheries sector in advance of this year's Atlantic hurricane season. According to a statement from CCRIF, this was the second straight year that members ceded more than $1 billion in risk to CCRIF.
During the 2020 hurricane season, CCRIF made eight payouts due to tropical cyclones Cristobal, Laura, Zeta, Eta, and Iota totaling $48 million to six member governments on their tropical cyclone and/or excess rainfall policies.
Since its creation in 2007, the facility has made 52 payouts totaling $202.5 million to 16 of its 23 members. A member country's policy is triggered when the modeled loss for a hazard event in a country equals or exceeds the attachment point selected by the country and specified in the policy contract.
The parametric structure of CCRIF's insurance contracts allows the facility to disburse funds to governments with 14 days of an event.
CCRIF is not designed to cover all losses on the ground resulting from a catastrophe. Instead, it's intended to provide a source of quick liquidity to governments as additional resources are mobilized to assist with the longer-term recovery and redevelopment processes following a catastrophe.
Previously known as the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company, CCRIF SPC is a segregated portfolio company that is owned, operated, and registered in the Caribbean. It limits the financial impact of such disasters as catastrophic hurricanes, earthquakes, and excess rainfall events on the Caribbean and Central American governments by quickly providing short-term liquidity when a parametric insurance policy is triggered.
CCRIF SPC was developed under the technical leadership of the World Bank and with a grant from the government of Japan. It was capitalized through contributions to a multidonor trust fund by the government of Canada, the European Union, the World Bank, the governments of the United Kingdom and France, the Caribbean Development Bank, and the governments of Ireland and Bermuda as well as through membership fees paid by participating governments.
August 02, 2021