CCRIF cat bond to benefit members
Members of the Caribbean Catastrophe Risk Insurance Facility (CCRIF), a not-for-profit risk pooling facility, will benefit from competitive pricing and increased efficiency as the Facility issues its first cat bond.
Issued by the World Bank, the $30 million transaction, which covers earthquake and tropical cyclone risk in the CCRIF member countries, will also offer investors access to new perils.
CCRIF CEO Isaac Anthony, said: “CCRIF has previously been reliant on the traditional reinsurance market for its risk transfer but as the Facility seeks to grow and expand we felt it would be beneficial to diversify the sources of risk capital to include the capital markets. We are pleased to be part of this ground-breaking initiative of the Bank, and this will enable us to continue to offer our tropical cyclone and earthquake policies at the lowest possible price – an important consideration for our members in these times of economic and fiscal challenges.”
The bond provides three years of annual aggregate protection and uses the same triggers and measurements as the Facility’s underlying parametric insurance model.
Madelyn Antoncic, vice president and treasurer at the World Bank, said: “With this first transaction under the Capital-at-Risk Notes Program, CCRIF benefits from access to the highly competitive prices offered by the cat bond market as well as from the efficiency of using this program. At the same time, cat bond investors benefit from exposure to new perils.”
CCRIF Chairman, Milo Pearson, added: “this partnership is another example of CCRIF’s continuing efforts to explore ways to help the countries in the Caribbean Region in building resilience to natural hazards.”
