The Caribbean Description
The Caribbean Description Expanded Info
The Caribbean System Description
CCRIF SPC is a segregated portfolio company, owned, operated and registered in the Caribbean. It limits the financial impact of catastrophic hurricanes, earthquakes and excess rainfall events to Caribbean and – since 2015 – Central American governments by quickly providing short-term liquidity when a parametric insurance policy is triggered. It is the world’s first regional fund utilizing parametric insurance, giving member governments the unique opportunity to purchase earthquake, hurricane and excess rainfall catastrophe coverage with lowest-possible pricing.
In 2007, the Caribbean Catastrophe Risk Insurance Facility was formed as the first multi-country risk pool in the world, and was the first insurance instrument to successfully develop parametric policies backed by both traditional and capital markets. It was designed as a regional catastrophe fund for Caribbean governments to limit the financial impact of devastating hurricanes and earthquakes by quickly providing financial liquidity when a policy is triggered.
In 2014, the Facility was restructured into a segregated portfolio company (SPC) to facilitate expansion into new products and geographic areas and is now named CCRIF SPC. The new structure, in which products are offered through a number of segregated portfolios, allows for total segregation of risk. In April 2015, CCRIF signed an MOU with COSEFIN - the Council of Ministers of Finance of Central America, Panama and the Dominican Republic - to enable Central American countries to formally join the facility.
CCRIF SPC is registered in the Cayman Islands and operates as a virtual organization, supported by a network of service providers covering the areas of risk management, risk modelling, captive management, reinsurance, reinsurance brokerage, asset management, technical assistance, corporate communications and information technology.
CCRIF offers earthquake, tropical cyclone and excess rainfall policies to Caribbean and Central American governments.
CCRIF helps to mitigate the short-term cash flow problems small developing economies suffer after major natural disasters. CCRIF’s parametric insurance mechanism allows it to provide rapid payouts to help members finance their initial disaster response and maintain basic government functions after a catastrophic event.
Since the inception of CCRIF in 2007, the facility has made 38 payouts to 13 member governments on their tropical cyclone, earthquake and/or excess rainfall policies totalling almost US$139 million. Also, CCRIF has made 7 payments totalling almost US$700,000 under member governments’ Aggregated Deductible Cover (ADC).
The ADC is a new policy feature for tropical cyclone and earthquake policies introduced in the 2017/2018 policy year. The ADC was designed to be akin to a dedicated reserve fund providing a minimum payment for events that are objectively not sufficient to trigger a CCRIF policy, because the modelled loss is below the attachment point.
The policy payouts and ADC payments are shown in the tables below.
CCRIF 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 Multi-Donor Trust Fund (MDTF) 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.
In 2014, another MDTF was established by the World Bank to support the development of CCRIF SPC’s new products for current and potential members, and facilitate the entry for Central American countries and additional Caribbean countries. The MDTF currently channels funds from various donors, including: Canada, through Global Affairs Canada; the United States, through the Department of the Treasury; the European Union, through the European Commission; Germany, through the Federal Ministry for Economic Cooperation and Development and KfW; and Ireland. In 2017, the Caribbean Development Bank, with resources provided by Mexico, approved a grant to CCRIF SPC to provide enhanced insurance coverage to the Bank’s Borrowing Member Countries.
Nineteen Caribbean governments are currently members of the facility: Anguilla, Antigua & Barbuda, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Dominica, Grenada, Haiti, Jamaica, Montserrat, St. Kitts & Nevis, Saint Lucia, Sint Maarten, St. Vincent & the Grenadines, Trinidad & Tobago and Turks & Caicos Islands. Two Central American governments are currently members of the facility: Nicaragua and Panama.
|Event||Country Affected||Payouts (US$)|
|Earthquake, 29 November 2007||Dominica||528,021|
|Tropical Cyclone Ike, September 2008||Turks and Caicos Islands||6,303,913|
|Earthquake, 12 January 2010||Haiti||7,753,579|
|Tropical Cyclone Earl, August 2010||Anguilla||4,282,733|
|Tropical Cyclone Tomas, October 2010||Barbados||8,560,247|
|St Vincent & the Grenadines||1,090,388|
|Tropical Cyclone Gonzalo, October 2014||Anguilla - Excess Rainfall Policy||493,465|
|Trough System, 7-8 November 2014||Anguilla||559,249|
|St. Kitts & Nevis||1,055,408|
|Trough System, 21 November 2014||Barbados||1,284,882|
|Tropical Storm Erika, 27 August 2015||Dominica - Excess Rainfall policy||2,402,153|
|Earthquake, June 9, 2016||Nicaragua||500,000|
|Tropical Cyclone Earl, August 2016||Belize - Excess Rainfall policy||261,073|
|Tropical Cyclone Matthew, September 2016||Barbados||975,000|
|Barbados - Excess Rainfall policy||753,277|
|Saint Lucia - Excess Rainfall policy||3,781,788|
|St. Vincent & the Grenadines - Excess Rainfall policy||285,349|
|Tropical Cyclone Matthew, October 2016||Haiti||20,388,067|
|Haiti - Excess Rainfall policy||3,020,767|
|Tropical Cyclone Otto, November 2016||Nicaragua||1,110,193|
|Tropical Cyclone Irma, September 2017||St. Kitts and Nevis||2,294,603|
|Anguilla - Excess Rainfall policy||158,823|
|Antigua & Barbuda||6,794,875|
|Turks & Caicos Islands||13,631,865|
|Turks & Caicos Islands - Excess Rainfall policy||1,232,769|
|The Bahamas - Excess Rainfall policy||163,598|
|Tropical Cyclone Maria, September 2017||Dominica||19,294,800|
|Dominica - Excess Rainfall policy||1,054,022|
|Saint Lucia - Excess Rainfall policy||671,013|
|Turks & Caicos islands||419,372|
|Barbados - Excess Rainfall policy||1,917,506|
|St. Vincent & the Grenadines - Excess Rainfall policy||247,257|
|Rainfall event, October 18-20 2017||Trinidad & Tobago - Excess Rainfall||7,007,886|
|Tropical Storm Kirk, October 2018||Barbados - Excess Rainfall||5,813,299|
|Rainfall event, October 18-20 2018||Trinidad & Tobago - Excess Rainfall||2,534,550|
|Total for the period June 2007 - October 2018|| |
|Total for Tropical Cyclone (14)|| |
|Total for Earthquake (4)|| |
|Total for Excess Rainfall (20)|| |
Payments Under the TC/EQ Aggregated Deductible Cover (ADC)
|Tropical Cyclone Irma, September 2017||Haiti||162,000|
|Tropical Cyclone Maria, September 2017||Saint Lucia||123,750|
|Antigua & Barbuda||32,400|
|St. Kitts & Nevis||27,150|
|Earthquake, October 7, 2018||Haiti||91,438|