Caribbean Catastrophe Risk Insurance Facility (CCRIF): Regional Parametric Insurance and Sovereign Disaster Risk Financing
The Caribbean Catastrophe Risk Insurance Facility (CCRIF) is the world’s first multi-country, multi-peril catastrophe risk pool, owned and operated by Caribbean governments. Launched in 2007 in response to the devastation caused by Hurricane Ivan in 2004, CCRIF was designed to limit the financial impact of catastrophic hurricanes and earthquakes — and more recently excess rainfall — by quickly providing short-term liquidity to member governments when a policy is triggered. Sixteen governments are currently members: Anguilla, Antigua & Barbuda, Bahamas, Barbados, Belize, Bermuda, Cayman Islands, Dominica, Grenada, Haiti, Jamaica, St. Kitts & Nevis, Saint Lucia, St. Vincent & the Grenadines, Trinidad & Tobago, and Turks & Caicos Islands.
CCRIF uses parametric insurance — rather than traditional indemnity insurance — meaning payouts are based on modelled loss estimates derived from hazard characteristics and national asset exposure, without requiring a post-event on-site loss assessment. This allows payouts to be made within two weeks of an event, and in some cases within one week via interim payments. For earthquakes, triggers are based on USGS data on location, intensity, and likely damage; for hurricanes, on National Hurricane Center data on storm tracks and wind intensity. By pooling risks across member countries into a single diversified portfolio, CCRIF reduces individual premium costs by approximately half compared to what countries would pay for equivalent standalone coverage.
Start-up activities were supported by the World Bank, the Caribbean Development Bank, and the governments of Canada, France, the UK, Ireland, and Bermuda. Since its inception, CCRIF has made eight payouts totalling US$32.2 million to seven member governments, including US$418,976 to Saint Lucia and US$528,021 to Dominica following the November 2007 Martinique earthquake, US$6.3 million to Turks and Caicos Islands after Hurricane Ike in 2008, and US$7.75 million to Haiti following the January 2010 earthquake.
Beyond insurance, CCRIF operates a Real-Time Impact Forecasting System (RTFS) providing member governments with real-time hurricane hazard and impact information to support emergency preparedness and response, and runs a Technical Assistance Programme to build national capacity in disaster risk management and climate change adaptation across the region.
Further information: www.ccrif.org