Partnership of the month: Caribbean Catastrophe Risk Insurance Facility
1 Jun 2014
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- The overarching theme of the Third International Conference on Small Island Developing States is "The sustainable development of small island developing States through genuine and durable partnerships". The Conference will serve as a forum to build on existing successful partnerships as well as to launch innovative and concrete new ones. The SD in Action newsletter will present a successful “Partnership of the Month” in each of its editions in the run-up to the Conference.
The Caribbean Catastrophe Risk Insurance Facility (CCRIF) is a risk pooling facility, owned, operated and registered in the Caribbean for Caribbean governments. Established in 2007 with a specific design to limit the financial impact of catastrophic hurricanes and earthquakes to Caribbean governments, the CCRIF quickly provides short term insurance payouts when a policy is triggered. It is the world’s first and, to date, only regional fund utilising parametric insurance, giving Caribbean governments the unique opportunity to purchase earthquake and hurricane catastrophe coverage with lowest-possible pricing.
The beauty of this partnership lies in the essence of its paradigm shift tactic in the way governments treat risk, particularly SIDS, with Caribbean governments leading the way in pre-disaster planning.
CCRIF was developed through the partnership of sixteen Caribbean governments and their generous development partners. Under the technical leadership of the World Bank and with a grant from the Government of Japan, the Facility was born. It was capitalised through contributions to a multi-donor Trust Fund 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, and membership fees paid by participating governments.
The Facility has made eight payouts, sum of US$32,179,470 to seven member governments, since its inception. All payouts were transferred to the respective governments immediately after the stipulated 14-day waiting period (and in some cases advances were made within a week) after each event.