CCRIF Member Governments Purchase US$1.2 Billion to Support Disaster Risk Insurance for 2022/23 Against Climate-Related Risks and Disasters – World

Grand Cayman, Cayman Islands, July 29, 2022. The CCRIF SPC is pleased to announce that its member governments will renew their insurance for hurricanes, heavy rains and earthquakes, as well as the fisheries sector for the 2022/23 year, which has commenced. on June 1, 2022. Due to the earthquake, typhoon and heavy rain policies, the members contributed US$ 1.2 billion – an increase of 10 percent over last year. Thirteen member states increased their coverage compared to the 2021/22 year. Renewal and increased demand for members show that countries continue to recognize the importance of funding to protect their economy from natural disasters, especially in relation to the increase in frequency and severity of natural disasters.

CCRIF continued to work with development partners to explore opportunities to support its members to maintain and increase coverage. The World Bank, in collaboration with (i) the European Union (EU) through the Caribbean Regional Resilience Building Facility (CRRB) managed by the Global Facility for Disaster Reduction and Recovery, provided additional funding to the CCRIF SPC to support eligible Caribbean countries. ; and (ii) the EU, Germany (through the KfW Development Bank and the Federal Ministry of Economic Cooperation and Development (BMZ)) and the United States Treasury (UST), through the Central American and Caribbean Catastrophe Risk Insurance Program, provided additional funding. funds to CCRIF SPC to support Central American members.

In the year 2022/2023, and thanks to the support of development agencies, CCRIF gave its members the opportunity to reduce the price of their policies or increase the purchase price or both by about 11 percent for hurricane policies and 24 percent. on the systems of excessive rainfall in the Caribbean and 15 to 30 percent for members of Central America. In addition to this support, CCRIF also offered discounts to its members as an incentive to increase coverage, including discounts to members for any increases in the previous year (2021/22) for hurricanes and earthquakes.

In previous years, the CCRIF SPC also offered the same discount to its members as part of the response to the COVID-19 pandemic of member states. For example, for the legal years 2020/21 and 2021/22 CCRIF SPC, with the support of the CRRB of the EU and Central America and the Caribbean Catastrophe Risk Insurance Program, was able to give countries the opportunity to increase support or reduce premium payments. up to 23 percent in the Caribbean and up to 50 percent in Central America.

In addition, CCRIF offers sales discounts and incentives every year to its members, because it works as a development insurance company, and has a great interest in the wishes of its members to promote sustainable development, recognizing that parametric insurance is necessary to reduce the volatility of budget. following natural disasters.

In addition, the World Bank provided substantial support to pilot countries Grenada and Saint Lucia for the fourth year in their 2022/23 COAST program. COAST is designed to support the fisheries sector and fishermen in response to climate-related disasters. The World Bank has been providing significant support to the two countries since COAST was launched in 2019.

CCRIF’s value to members is continually demonstrated through its rapid disbursements after natural disasters, which allow governments to address their critical needs, including support for vulnerable communities. CCRIF made three payments to members in 2021/22 – US$40 million to the Government of Haiti after the earthquake in August 2021, and payments to Barbados after Tropical Cyclone Elsa and Trinidad and Tobago following heavy rains in August 2021. Payments to Haiti represents the largest payment that the CCRIF has made since its inception in 2007. Since 2007, the Center has paid a total of 54 funds to its 16 member governments, approximately US $ 245 million – all paid within 14 days of the event. Based on the evaluation of the use of the payments, these funds have helped more than 3.5 million people in the Caribbean and Central America and have been used to support the rehabilitation of critical infrastructure.

States can purchase policies with up to $150 million per risk, although the limited funds that states face continue to prevent them from doing so and many cannot afford policies that match their state’s risk profile, even now. discount.

CCRIF was created as the first multi-country, multi-risk pool in the world and was the first insurance tool to successfully develop parametric insurance for natural disasters. Parametric insurance, offered by CCRIF, is one of the disaster financing tools available to governments to protect themselves financially following natural disasters. CCRIF’s parametric insurance policy is specifically designed to be highly robust, with low transaction frequency and to pay out quickly within 14 days of the policy being issued. CCRIF insurance fills the financial gap – the place between the country’s short-term access immediately after a natural disaster and the long-term rehabilitation and rehabilitation before relief begins. This means that the CCRIF is not designed to destroy all the losses on the ground but to provide countries with an immediate injection of resources to meet the current needs of the country and help those who are most vulnerable.

International discussions on sustainable recovery after COVID call for investment in small island developing states in several countries to address disaster risks and tools such as health insurance and to encourage governments to develop, in collaboration with partners in governments and civil society , other types. about insurance policies for vulnerable groups. CCRIF supports this process and is currently leading the Climate Risk Adaptation and Insurance in the Caribbean (CRAIC) Project in collaboration with the Munich Climate Insurance Initiative, ILO Impact Insurance, and Guardian General Insurance Ltd. Protection Policy (LPP), a small insurance policy designed to protect the lives of people with low incomes by providing quick cash in response to adverse weather conditions. In addition, CCRIF continues to release COAST products to the fisheries sector, which was halted by COVID. CCRIF continues to expand its business and continues to work with the Caribbean Electric Utility Services Corporation (CARILEC) to produce its electricity products.

About CCRIF SPC:

CCRIF SPC is an independent company, owned, managed and registered in the Caribbean. It prevents the economic impact of hurricanes, earthquakes and heavy rain events in the Caribbean and Central American governments by quickly providing short-term water when the parametric insurance policy is triggered. It is the first international fund to use health insurance, giving member governments the unique opportunity to purchase earthquake, hurricane and storm damage at very low rates. The CCRIF was developed under the technical leadership of the World Bank with support from the Government of Japan. It was established through contributions to the 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. and participating governments. In 2014, the second MDTF was established by the World Bank to help prepare the new CCRIF SPC for existing and potential members and to facilitate the entry of Central American countries and other Caribbean countries. MDTF currently uses funding from a variety of donors, including: Canada, through Global Affairs Canada; United States, through the Department of the Treasury; The European Union, through the European Commission, and Germany, through the Federal Ministry for Economic Cooperation and Development and KfW. Additional funding has been provided by the Caribbean Development Bank, with assistance provided by Mexico; Government of Ireland; and the European Union through the Regional Resilience Building Facility managed by the Global Facility for Disaster Reduction and Recovery (GFDRR) and The World Bank.