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What is CCRIF?

CCRIF is the first multi-country risk pool in the world, and is also the first insurance instrument to successfully develop parametric policies backed by both traditional and capital markets. It is a regional catastrophe fund for Caribbean governments, designed to limit the financial impact of devastating hurricanes and earthquakes by quickly providing financial liquidity when a policy is triggered. CCRIF operates as a public-private partnership, and is set up as a non-profit ‘mutual’ insurance entity in the Cayman Islands.


Why was CCRIF established?

The CCRIF idea was prompted by Hurricane Ivan in 2004, which caused billions of dollars of losses across the Caribbean. In both Grenada and the Cayman Islands, losses were close to 200% of the national annual GDP. Following the passage of Ivan, the Caribbean Community (CARICOM) Heads of Government held an emergency meeting to discuss critical issues surrounding the need for the provision of catastrophe risk insurance for its members.


What is the main purpose of CCRIF?

CCRIF was developed to help mitigate the short-term cash flow problems small developing economies suffer after major natural disasters. A critical challenge is often the need for short-term liquidity to maintain essential government services until additional resources become available. Although ex post disaster funding from bilateral and multilateral agencies can be an important component of a government’s catastrophe risk management strategy, over-reliance on this approach has obvious limitations.


What products does CCRIF offer?

CCRIF has, in its first three years of operation, offered separate hurricane (wind) and earthquake policies. Caribbean governments may purchase coverage which triggers for a ‘one-in-15-year’ hurricane and a ‘one-in-20-year’ earthquake, with maximum coverage of US$100M available for each peril. The cost of coverage is a direct function of the amount of risk being transferred, ensuring no cross-subsidisation of premiums and a level playing-field for all participants.


Will CCRIF have a new product involving excess rainfall coverage in the near future?

Yes. CCRIF excess rainfall coverage will be available during the 2010/11 policy year. The development began with many CCRIF participating countries and stakeholder partners expressing a strong interest in being able to contract for catastrophic flood coverage. In response to these needs, CCRIF, using the World Bank’s Global Fund for Disaster Risk Mitigation, partnered with the Caribbean Institute for Meteorology and Hydrology (CIMH) to determine the feasibility of this coverage for member governments.



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