All 16 member governments of the Caribbean Catastrophe Risk Insurance Facility (CCRIF) have pledged to renew their hurricane and earthquake insurance for the 2012-2013 policy year.
In a press release, CCRIF said since its initiation in 2007, these countries have incorporated catastrophe insurance into their national disaster risk management programmes by purchasing its parametric hurricane and earthquake coverage.
The US National Oceanic and Atmospheric Administration (NOAA) forecast that this year the Atlantic Hurricane Season will have slightly reduced activity compared with the 1981-2010 average. NOAA’s Climate Prediction Centre estimates that 2012 will have nine to 15 named storms, including four to eight hurricanes, one to three of which will become major hurricanes (with peak winds of 111mph or higher, ranking Category 3, 4 or 5).
“Caribbean countries have long recognised the need to prepare for the annual hurricane season. Notwithstanding the economic downturn facing many Caribbean countries, there is a realisation of the importance of allocating resources for disaster risk reduction and risk transfer initiatives within a comprehensive disaster risk management framework,” the release said.
For the 2012-2013 policy year which started on June 1, CCRIF provided its member countries with a premium rebate equal to 25% of the premium paid in the previous policy year.
This followed on the heels of a quiet 2011-2012 policy year, in which none of the policies held by member countries were triggered. According to Isaac Anthony, Permanent Secretary in St Lucia’s Ministry of Finance, Economic Affairs and National Development and CCRIF Board Member, the “initiative provides a tangible benefit to CCRIF’s members if payouts during the prior year result in a significant underwriting profit while fully maintaining CCRIF’s sound financial position and its unparalleled ability to pay the claims of its members.” CCRIF has encouraged member governments to use these savings either to purchase additional coverage or to implement programmes for improving hazard risk resilience as well as climate change adaptation towards reducing the impact of natural hazards. At a recent forum on Globalisation, Climate Change and Rural Resilience at the University of the West Indies, World Bank Sector Manager, Sustainable Development for China and Mongolia, East Asia and Pacific, Ede Ijjasz-Vasquez said “countries that are ready for the disasters and challenges of today would be in a much better position to handle climate change, in whatever direction it takes us.”
According to the release, this year the CCRIF will add the excess rainfall product to its portfolio of offerings to Caribbean governments. This product covers extreme rainfall events, which are not included in current hurricane polices. CCRIF’s hurricane policies are based on wind and storm surge.
Since 2007, the Facility has made eight payouts – on three earthquake policies and five hurricane policies – totalling US$32,179,470 to seven member governments. All payouts were transferred to the respective governments less than one month (and in some cases within a week) after each event. CCRIF funds have often been the first infusion of cash to arrive in these countries after the event and have been used to capitalise special recovery funds, to restore services and clear affected areas and generally to “keep the wheels of government turning” immediately following a disaster.
