The CCRIF SPC (formerly known as the Caribbean Catastrophic Risk Insurance Facility), has announced that at its renewals this year, some 66 parametric insurance policies were renewed by its members, while the member base also grew and the risk diversification within the pool continues to expand.
Impressively, it is now 16 years since the CCRIF launched and began selling Caribbean governments CCRIF parametric insurance coverage to protect their economies from devastating hurricanes, earthquakes, and excess rainfall events.
Those member governments in the Caribbean and Central America are now ceding more than US $1 billion in insurance coverage to CCRIF, making it the largest dedicated parametric risk pool of its kind on the planet.
For the 2023/24 CCRIF policy year, starting June 1st, CCRIF member governments purchased 66 policies in total, with the breakdown as follows:
Tropical Cyclone – 22 policies
Excess Rainfall – 24 policies
Earthquake – 15 policies
COAST (fisheries) – 2 policies
Caribbean Electric Utilities – 3 policies
CCRIF also added a new member, in its latest corporate buyer of parametric insurance protection.
This was GRENLEC, Grenada’s electric utility company, which has purchased parametric coverage for the first time this year.
The addition of corporate risk has been a way to expand the risk pool and add more diversification to it as well, with traction steadily being made.
CCRIF has also continued to enhance its parametric risk transfer products, adding three new policy features at this year’s renewal.
An update to the CCRIF SPHERA model for Tropical Cyclone adds a new policy endorsement for localised events called the Localized Damage Index (LDI), which can cover tropical cyclone events where losses are highly concentrated in small sections of a country.
CCRIF’s Excess Rainfall model has been upgraded from the current XSR 2.5 model to XSR 3.0, with two new policy endorsements: a “wet season trigger” (WST), which can detect excess rainfall events that occur when the soil is saturated, and a “localized event trigger” (LET) for extreme localized events.
These enhancements further add utility to the CCRIF parametric insurance offering and can be especially relevant for corporate buyers such as the utilities it now targets, allowing CCRIF to offer tropical cyclone and rainfall coverage for events that occur under very specific conditions that contribute to the negative impacts.
CCRIF has now made made 60 payouts totalling US $261.8 million to 16 member governments, all within 14 days of events occurring thanks to the parametric nature of the product.
It’s estimated that these CCRIF payouts have benefitted over 3.5 million people across the Caribbean and Central America, with more than 60 per cent of the payouts used by governments to address immediate needs post disaster.