Washington, DC, June 15, 2012 – The Caribbean Catastrophe Risk Insurance Facility (CCRIF) has secured US$120 million of claims paying capacity on the international reinsurance and capital markets. World Bank inter-mediated a transfer of US$30 million of risk in the top layer of CCRIF’s reinsurance program for 2012-2013. CCRIF was set up to ensure that the governments of its 16 members will have immediate access to liquidity if hit by a hurricane or earthquake.
About the CCRIF:
CCRIF is the first multi-country catastrophe risk insurance facility in the world and is the first to successfully offer parametric policies backed by reinsurers through both traditional reinsurance and capital markets. It operates as an independent, non-profit legal entity domiciled in the Cayman Islands.
CCRIF was established in 2007, following a process of development led by the World Bank with financial support from the Government of Japan in response to a request from the CARICOM Heads of State made in the wake of the devastation caused by Hurricane Ivan in 2004 for assistance in creating a structure that would provide Caribbean governments with affordable insurance coverage against potential revenue losses from natural disasters, thereby reducing their financial vulnerability to such disasters.
CCRIF has 16 members: Anguilla, Antigua & Barbuda, Bahamas, Barbados, Belize, Bermuda, Cayman Islands, Dominica, Grenada, Haiti, Jamaica, St. Kitts & Nevis, St. Lucia, St. Vincent & the Grenadines, Trinidad & Tobago, and Turks & Caicos Islands.
It provides parametric coverage against hurricanes and earthquakes to its members and has just launched an excess rainfall product. Payouts are triggered by natural disasters that meet the previously defined parameters with respect to magnitude and are made in cash within two weeks of the event.
A Multi-donor Trust Fund was created to support CCRIF's establishment and initial operations. The contributors were: Bermuda, Canada, Caribbean Development Bank, European Union, France, Ireland and the IBRD itself. The trust fund was completely disbursed by the end of 2011.
CCRIF is fully self-standing and self-sustaining. It has achieved a level of financial resilience higher than international standards. Given its reinsurance, it could pay claims associated with a series of disasters expected to occur only once in 1,400 years without needing to draw on more than a small share of its own capital. Using its entire capital, it could pay claims associated with a 1 in 10,000 year series of disasters.