Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC) is an insurance company headquartered in the Cayman Islands. The sixteen original member-countries of CCRIF included participants in CARICOM, and the membership of the Board of Directors is selected by CARICOM and by the

Caribbean Development Bank The Caribbean Development Bank (CDB) is a financial institution that helps Caribbean nations finance social and economic programs in its member countries. CDB was established by an Agreement signed on October 18, 1969, in Kingston, Jamaica, and ent ...

. Founded in 2007, CCRIF is the first multi-country risk pool in the world, and was the first insurance instrument to successfully develop parametric policies backed by both traditional and capital markets. These parametric policies release funds based upon factors of a calamity such as

rain Rain is water droplets that have condensed from atmospheric water vapor and then fall under gravity. Rain is a major component of the water cycle and is responsible for depositing most of the fresh water on the Earth. It provides water f ...

fall or wind speed, which can speed up the payout of policies rather than after damages are assessed. Unused funds are kept as reserves for the CCRIF. The fund can also draw upon $140 million in funds underwritten by

reinsurance Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself (at least in part) from the risk of a major claims event. With reinsurance, the company passes on ("cedes") some part of its own ins ...

. Other regions have since setup similar government disaster instance including in the

African Union The African Union (AU) is a continental union consisting of 55 member states located on the continent of Africa. The AU was announced in the Sirte Declaration in Sirte, Libya, on 9 September 1999, calling for the establishment of the Africa ...

and the

Pacific Islands Forum The Pacific Islands Forum (PIF) is an inter-governmental organization that aims to enhance cooperation between countries and territories of Oceania, including formation of a trade bloc and regional peacekeeping operations. It was founded in 197 ...

History

From 2004 through 2007, planning to create the Caribbean Regional Risk Insurance Facility, or CCRIF, was performed under the technical leadership of the

World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...

with a grant from the Government of

Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the n ...

. In 2007, CCRIF offered its first parametric insurance products, earthquake and tropical cyclone. In 2007, CCRIF made its first payout to the governments of

St Lucia Saint Lucia ( acf, Sent Lisi, french: Sainte-Lucie) is an island country of the West Indies in the eastern Caribbean. The island was previously called Iouanalao and later Hewanorra, names given by the native Arawaks and Caribs, two Amerindi ...

and

Dominica Dominica ( or ; Kalinago: ; french: Dominique; Dominican Creole French: ), officially the Commonwealth of Dominica, is an island country in the Caribbean. The capital, Roseau, is located on the western side of the island. It is geographical ...

for the earthquake on November 29, and in 2008, CCRIF made its first payout to the government of the

Turks and Caicos Islands The Turks and Caicos Islands (abbreviated TCI; and ) are a British Overseas Territory consisting of the larger Caicos Islands and smaller Turks Islands, two groups of tropical islands in the Lucayan Archipelago of the Atlantic Ocean and ...

in response to damage from

Hurricane Ike Hurricane Ike () was a powerful tropical cyclone that swept through portions of the Greater Antilles and Northern America in September 2008, wreaking havoc on infrastructure and agriculture, particularly in Cuba and Texas. Ike took a sim ...

. During its early years of operation, day-to-day operations of CCRIF were handled by Caribbean Risk Managers Limited (CaribRM), who acted as the facility supervisor. In 2013, Isaac Anthony, previously a member of the Board of Directors of CCRIF and the Permanent Secretary for Planning and National Development in the Government of

, was appointed the first Chief Executive Officer. In 2014, CCRIF reorganized into a

segregated portfolio company A segregated portfolio company (or SPC), sometimes referred to as a protected cell company, is a company which segregates the assets and liabilities of different classes (or sometimes series) of shares from each other and from the general assets o ...

, or SPC. CCRIF SPC began to offer its portfolio of insurance products to countries in Central America, including members of the Council of Ministers of Finance of Central America, Panama and the Dominican Republic (COSEFIN). And in 2014, CCRIF SPC also was the first company to participate in the

Capital-at-Risk Notes Program to diversify its sources of risk capital. At the G7 leaders summit in 2015, CCRIF SPC was highlighted as an example to be used, "... to increase by up to 400 million the number of people in the most vulnerable developing countries who have access to direct or indirect insurance coverage against the negative

impact of climate change The effects of climate change impact the physical environment, ecosystems and human societies. The environmental effects of climate change are broad and far-reaching. They affect the water cycle, oceans, sea and land ice (glaciers), sea ...

related hazards by 2020..." At the

2015 United Nations Climate Change Conference The 2015 United Nations Climate Change Conference, COP 21 or CMP 11 was held in Paris, France, from 30 November to 12 December 2015. It was the 21st yearly session of the Conference of the Parties (COP) to the 1992 United Nations Framework Conv ...

in Paris,

Ban Ki-moon Ban Ki-moon (; ; born 13 June 1944) is a South Korean politician and diplomat who served as the eighth secretary-general of the United Nations between 2007 and 2016. Prior to his appointment as secretary-general, Ban was his country's Ministe ...

, Secretary General of the United Nations, mentioned CCRIF SPC as an example as he launched an initiative on

climate resilience Climate resilience is defined as the "capacity of social, economic and ecosystems to cope with a hazardous event or trend or disturbance".IPCC, 2022Summary for Policymakers .-O. Pörtner, D.C. Roberts, E.S. Poloczanska, K. Mintenbeck, M. Tignor, ...

that included increased access to insurance, and President Obama announced a commitment of $30 million by the United States government to provide additional insurance through platforms, including CCRIF, in his remarks to the

Alliance of Small Island States Alliance of Small Island States (AOSIS) is an intergovernmental organization of low-lying coastal and small island countries. AOSIS was established in 1990, ahead of the Second World Climate Conference. The main purpose of the alliance is to co ...

at the Paris Conference. In 2016, the World Bank announced the Pandemic Emergency Facility built using CCRIF SPC as a model.

Parametric Insurance Products

Earthquake

Updated in 2019 to use the SPHERA model (System for Probabilistic Hazard Evaluation and Risk Assessment), the CCRIF earthquake insurance product is built from a number of components including the exposure module, hazard module, vulnerability module, and loss module. All of these components contribute to the insurance module, which is used to calculate the premium, the conditions under which a country's policy is triggered, and the amount of payout in the event of trigger.

Tropical cyclone

Updated in 2019 to use the SPHERA model (System for Probabilistic Hazard Evaluation and Risk Assessment), the CCRIF tropical cyclone insurance product is based on a probabilistic assessment of the risk of events and induced losses including near real-time estimates of damages to infrastructure due to windspeed and storm surge. A combination of exposure, hazard, vulnerability, and loss modules are used to creates the final insurance policy including attachment and exhaustion points used for pricing and payouts.

Excess rainfall

In 2014, CCRIF expanded its product line to include parametric insurance for excess rainfall.

Fisheries Sector (COAST)

In 2016, the

announced a partnership with CCRIF SPC to create a new insurance product to protect food security and promote the resilience of the small-scale fisheries sector in the Caribbean. In 2019, CCRIF SPC offered the Caribbean Ocean and Aquaculture Sustainability faciliTy (COAST) insurance product as a pilot in the countries of

and

Grenada Grenada ( ; Grenadian Creole French: ) is an island country in the West Indies in the Caribbean Sea at the southern end of the Grenadines island chain. Grenada consists of the island of Grenada itself, two smaller islands, Carriacou and Pet ...

. The COAST product was renewed in 2020 and again in 2021. During the

2021 United Nations Climate Change Conference The 2021 United Nations Climate Change Conference, more commonly referred to as COP26, was the 26th United Nations Climate Change conference, held at the SEC Centre in Glasgow, Scotland, United Kingdom, from 31 October to 13 November 2021. The ...

, the

Republic of Ireland Ireland ( ga, Éire ), also known as the Republic of Ireland (), is a country in north-western Europe consisting of 26 of the 32 counties of the island of Ireland. The capital and largest city is Dublin, on the eastern side of the island. ...

announced a gift of one million euro's to support the expansion of COAST to additional countries. COAST has been studied as an instrument of

science diplomacy Science diplomacy is the use of scientific collaborations among nations to address common problems and to build constructive international partnerships. Science diplomacy is a form of new diplomacy and has become an umbrella term to describe a n ...

promoting finance for development to support

by linking adaptive social safety nets for individuals, community-level

weather Weather is the state of the atmosphere, describing for example the degree to which it is hot or cold, wet or dry, calm or stormy, clear or cloudy. On Earth, most weather phenomena occur in the lowest layer of the planet's atmosphere, the ...

risks, and a

sovereign ''Sovereign'' is a title which can be applied to the highest leader in various categories. The word is borrowed from Old French , which is ultimately derived from the Latin , meaning 'above'. The roles of a sovereign vary from monarch, ruler or ...

financial instrument.

Electric utilities sector

In 2020, CCRIF SPC announced the offering of a new parametric product for electric utilities. This is the first parametric product by CCRIF SPC to target private firms.

References

{{reflist

External links

CCRIF SPC Frequently Asked Questions
Financial services companies established in 2007 Insurance companies of the Cayman Islands International business Caribbean Community