CCRIF insurance up by 8% as EU provides COVID-19 grant

Governments in the Caribbean have ceded more than US$1 billion in risk to the Caribbean Catastrophe Risk Insurance Facility (CCRIF), as members renewed their parametric insurance and the European Union (EU) contributed to the fund.

The renewal comes ahead of the 2020 Atlantic hurricane season and represents an 8 percent increase on 2019 cover for tropical cyclone, excess rainfall, earthquake and fisheries.

The EU has also provided a grant of €10 million (US$11 million) to CCRIF, for premium support or to increase coverage for its Caribbean members, under its EU Global COVID-19 Response to support governments hit hard by pandemic disruption.

Funds were sent to CCRIF through the EU Regional Resilience Building Facility managed by the Global Facility for Disaster Reduction and Recovery (GFDRR) and The World Bank.

CCRIF said that the renewal of countries’ catastrophe risk insurance policies at this time signals the strategic importance they put on disaster risk financing. Such financing is viewed as key to advancing sustainable development prospects. CCRIF added that the member governments welcomed the EU’s additional support in the context of shrinking fiscal space.

For each member government, the EU fund is equivalent to up to a 26 percent discount on total gross premium or an increase in policy coverage under their CCRIF parametric insurance. This is in addition to discounts provided by the CCRIF, such as a 5 percent discount on gross premium for Tropical Cyclone coverage, and a further discount of 15 percent on additional coverage purchased by members for increased Tropical Cyclone and/or Earthquake coverage for the 2020/21 policy year.

“Mitigation of COVID-19 impacts ahead of the hurricane season that already started in the region requires extraordinary and coordinated measures,” said Daniela Tramacere, EU ambassador to Barbados, the Eastern Caribbean States, OECS and

CARICOM/CARIFORUM. “The EU is strongly committed to stand together with its partners in the Caribbean, providing emergency support and participating in the social/economic recovery process. The €10 million support has been provided to CCRIF SPC to ease payment of member countries’ premiums and improve their risk coverage against natural hazards.”