The Caribbean Catastrophe Risk Insurance Facility (CCRIF) aims to limit the adverse impact of catastrophes such as hurricanes, earthquakes and excess rainfall on member governments and their populations. Formed in 2007, it was the first multi-country risk pool in the world.
How it works:
CCRIF is an insurance policy subscribed by member countries (primarily in the Caribbean), which allows for rapid disbursement of funds in the event of a catastrophe. Payout of funds to affected members is determined by a trigger event occurring (parametric insurance). Financial liquidity and availability of funds when disasters occur minimizes the negative impact of these events on governments and their populations by allowing for swift deployment of resources towards disaster response efforts. The insurance payout mechanism mitigates cash flow issues often experienced especially by small developing countries when responding to disasters.
Since its inception in 2007, the CCRIF facility has made 38 payouts to 13 member governments on their tropical cyclone, earthquake and excess rainfall policies totaling almost US$139 million. Also, CCRIF has made 7 payments totaling almost US$700,000 under member governments’ Aggregated Deductible Cover (ADC), which allows for minimum payments for events not meeting the minimum trigger threshold.
The World Bank led the development of the CCRIF and provided the technical expertise, while donor governments, the Caribbean Development Bank and member countries (through premium payments) provided initial funding. Member governments currently include 19 Caribbean countries and 2 Central American countries.