Caribbean cat pool CCRIF adds Honduras, expands parametric coverage in Central America
The Caribbean Catastrophe Risk Insurance Facility (CCRIF), a multi-risk insurance pool designed to protect the region, has added Honduras as its fourth member from Central America, expanding parametric insurance coverage in the region.
The Honduras Government has purchased parametric insurance coverage for excess rainfall, effective from June 1, 2023.
CCRIF CEO Isaac Anthony said: “I am happy to welcome Honduras to CCRIF and look forward to continuing to engage with the Government as it accesses CCRIF parametric insurance as an effective means of closing the protection gap and strengthening the country’s public financial management framework. Access to excess rainfall insurance will allow the Government the flexibility to begin recovery efforts immediately following a natural disaster as payouts received within 14 days of an event can be used to address the country’s most urgent needs, including helping vulnerable populations or rehabilitating critical infrastructure among other areas.”
The Ministry of Finance of the Republic of Honduras (SEFIN) said in a statement: The Government Plan of President Xiomara Castro underscores the urgency of enacting public policies focused on disaster protection, prevention, and planning. Such policies are designed to ensure the resilience of our population, as well as bolster the infrastructure and resources to confront the growing severity and frequency of natural hazard events. Through the recently signed ‘agreement with CCRIF, our goal is to continue strengthening Honduras’ public finances and its capacity to respond to and recover from disasters, without forgetting the enhancement of institutional capacity to effectively manage a resilient and inclusive recovery and reconstruction process.
Honduras’ entry and participation in CCRIF was supported by the Central America and Caribbean Catastrophe Risk Insurance Program Multi-Donor Trust Fund (MDTF), administered by the World Bank. The MDTF offers benefits such as financing a country’s Participation Fee, which is a requirement for prospective members to join the Facility.
Nicaragua was the first Central American country to join the Facility, when COSEFIN1 and CCRIF signed a memorandum of understanding in 2015 to enable COSEFIN members to gain access to CCRIF’s parametric insurance products. Panama joined in 2018 and Guatemala in 2019. Since 2015, CCRIF has made 8 payouts to these three countries, totalling US$47.5 million. Since the inception of CCRIF in 2007, the Facility has made 60 payouts totalling US$261.8 million to 16 of its member governments.
CCRIF membership now stands at 26: 19 Caribbean governments, 4 Central American governments, and 3 Caribbean electric utility companies. GRENLEC, Grenada’s electric utility, also joined CCRIF in 2023. Currently CCRIF offers parametric insurance policies for tropical cyclones, excess rainfall, and earthquakes and for the fisheries and electric utilities sectors (the latter being for financially protecting transmission and distribution systems of electric utilities against wind perils associated with tropical cyclones). CCRIF is currently developing new models and products for new perils such as rainfall runoff/flooding and drought as well as other sectors such as water utilities and agriculture.
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