European Union provides US$4.7 million to Caribbean Governments for CCRIF Parametric Insurance for 2023, totalling about US$49 Million in Grant Support since 2007
Grand Cayman, Cayman Islands, July 3, 2023.
The European Union continues to provide support to CCRIF SPC as a means of subsidizing
premiums on the parametric insurance policies of its Caribbean members. This policy year, which
started on June 1, 2023, the EU provided CCRIF with US$4.7 million in support of the 12 ODA-
eligible Caribbean members of CCRIF1 to subsidize premiums for tropical cyclone and excess
rainfall. CCRIF’s parametric insurance helps countries to financially protect their economies from
devastating natural disasters such as hurricanes and excess rainfall.
Provided through a programme administered by the World Bank, the EU funds enabled CCRIF to
provide discounts of approximately 14 per cent on the gross premium of members’ tropical cyclone
and excess rainfall policies. The EU funds also enable technical assistance oriented towards
ensuring the sustainability of climate and disaster risk insurance in the years to come.
This current support is a continuation of the EU’s efforts to assist Caribbean countries in
maintaining climate and disaster risk protection during hard economic times. Over the period
2007-2023, the European Union has been one of CCRIF’s main development partners. In total,
since the establishment of CCRIF in 2007, the EU’s contribution to CCRIF is equivalent to more
than €45 million. The EU contributed to the initial capitalization of CCRIF, the entry of new
countries, and the development of new parametric insurance products through technical assistance
as well as support to respond to the significant disruption of Caribbean economies as a
consequence of the COVID-19 pandemic.
During 2020-2022, the EU support was managed in coordination with the EU Caribbean Regional
Resilience Building Facility administered by the World Bank’s Global Facility for Disaster
Reduction and Recovery (GFDRR). This support provided each Caribbean CCRIF member
country with premium discounts or increases in policy coverage. During the past three years
(2020/21 to 2022/23) several CCRIF member countries used this funding to increase tropical
cyclone and/or excess rainfall coverage.
CCRIF CEO, Isaac Anthony, thanked the EU for its continuous support and reiterated the
importance of contributions of the donor community. He remarked, “The success of CCRIF is
undoubtedly due in part to the support – both technical and financial – that we receive from our
development partners. This support from the EU continues to be key to allowing us to meet the
needs of our current and potential members. It allows us to make available more affordable
insurance coverage to our members, to improve the long-term sustainability of CCRIF, and to
develop new products for additional perils and sectors.”
Head of the EU Delegation to Barbados, the Eastern Caribbean States, the OECS and
CARICOM/CARIFORUM, Malgorzata Wasilewska, said: “The renewal of countries’
catastrophe risk insurance policies at this time signals the growing strategic importance placed
on disaster risk financing as key to advancing sustainable development prospects in the context
of shrinking fiscal space. We are proud to say that the EU contribution supported important
milestones in this regard.”
She also added that “Recent and past support from the EU to CCRIF was adequate to ease
payment of member countries’ premiums and improve their risk coverage against natural
hazards. However, the global context calls for constant search for innovative solutions to allow
the successful facility to grow accordingly. The EU is partnering with CCRIF to focus on self-
sustainable mechanisms allowing for progress in the region, while keeping this valuable tool at
the service of the countries.”
CCRIF currently offers five parametric insurance products – earthquake, based on modelled losses
due to ground shaking; tropical cyclone, based on modelled losses due to wind and storm surge;
excess rainfall, based on modelled losses due to the amount of rainfall; the Caribbean Ocean and
Aquaculture Sustainability FaciliTy (COAST) product for the fisheries sector, based on rain,
waves, wind and storm surge; and a product for electric utilities, based on losses due to wind for
their transmission and distribution lines. CCRIF is continuing the rollout of the COAST product,
and also the electric utilities product, in collaboration with the Caribbean Electric Utility Services
Corporation (CARILEC). Additionally, the Facility will launch a product this year for water utility
companies in partnership with the Inter-American Development Bank and a product for rainfall
runoff, initially for Guyana and Suriname, which will be offered to Central American and larger
Caribbean countries in subsequent years.
Since the inception of CCRIF in 2007, the Facility has made 59 payouts totalling US$261.4 million
to 16 of its member governments – all within 14 days of the triggering of an event. CCRIF payouts
were not designed to cover all losses on the ground but to provide an injection of quick liquidity
immediately following a natural catastrophe to allow governments to quickly begin recovery,
including supporting the most vulnerable in their populations. A rough assessment of the
beneficiaries of CCRIF’s payouts shows that over 3.5 million persons in the Caribbean and Central
America have benefitted directly or indirectly from these payouts. Uses of payouts over the years
have included providing food, shelter, and medicine for affected persons; stabilizing drinking
water plants; providing building materials for persons to repair their homes; and repairing critical
infrastructure such as roads and bridges as a means of enabling movement and access in and out
of communities, among others. Governments have also used payouts to support key sectors such
as agriculture, tourism, and education.
The post European Union provides US$4.7 million to Caribbean Governments for CCRIF Parametric Insurance for 2023, totalling about US$49 Million in Grant Support since 2007 first appeared on SKNIS.
