June 2, 2009 - All 16 Caribbean member governments renewed their catastrophe policies with the Caribbean Catastrophe Risk Insurance Facility for the 2009/10 policy period. Member governments were able to take advantage of a 10% decrease in premium costs from the CCRIF by increasing coverage for hurricanes, earthquakes or both for the same premium as last year. Notably, rates also decreased by ten percent for the 2007/2008 policy period, making this year’s premium the lowest yet.
The Caribbean Development Bank has joined the World Bank this year in providing premium financing support to some CCRIF participants as they faced budgetary tightening due to the global economic crisis. CCRIF leverages its own capital into a higher level of claims-paying capacity through the purchase of reinsurance; this year’s panel has been expanded to include Partner Re, who join Munich Re, Swiss Re, Paris Re and Hiscox in providing traditional risk transfer capacity to CCRIF. A separate capital market transaction with the World Bank Treasury provides further non-traditional capacity.
Isaac Anthony, Permanent Secretary in the Ministry of Finance in Saint Lucia, and a member of the Facility’s board, offered his thanks for this support. “We have been grateful for the financing support of the World Bank. We are also grateful for the support offered by the CDB to not only Saint Lucia but several other Caribbean governments in meeting premium obligations in this year of harder economic times. We realise the importance of remaining a member of the Facility, particularly given the reduced financial capacity which we and many of our CARICOM partners would have available to deal with a major natural catastrophe event.”
All CCRIF policies are renewed on 1 June at the start of the Atlantic Hurricane Season. In addition to coverage for wind damage, all countries exposed to earthquake risk also purchase coverage for that peril; the 28 May earthquake off the north coast of Honduras was felt in a number of CCRIF member countries and serves as a reminder of the ever-present earthquake risks faced by the region.
About the CCRIF: The CCRIF is the first multi-country risk pool in the world, and is also the first insurance instrument to successfully develop a parametric policy backed by both traditional and capital markets. It is a regional insurance fund for Caribbean governments designed to limit the financial impact of catastrophic hurricanes and earthquakes to Caribbean governments by quickly providing financial liquidity when a policy is triggered. Sixteen governments are members of the fund: 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 the Turks and Caicos Islands. Last year the CCRIF paid out approximately US$6.3M to the Turks and Caicos Islands in the aftermath of Hurricane Ike.
Caribbean Risk Managers Ltd, the risk management arm of the CGM Gallagher Group . the Caribbean’s largest insurance broker, is the Facility Supervisor of the CCRIF.