As the 2020 Atlantic hurricane season gears up, the Caribbean Catastrophic Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC) has announced that all of its member countries, including The Bahamas, have renewed their parametric insurance coverage for over $1 billion.
The policy covers tropical cyclones, excess rainfall, earthquakes and fisheries and the coverage this year represents an eight percent increase over years past.
The government has allocated $3.2 million in the 2020/2021 budget for this year’s CCRIF insurance policy. The Bahamas benefited from a payment of US$12,824,153 from the facility following the deadly Category 5 Hurricane Dorian last year.
In addition to the renewed policies, CCRIF SPC will also facilitate special assistance from the European Union (EU) to member countries.
“To support Caribbean governments whose social and economic sectors have been significantly disrupted by COVID-19, the European Union under its global COVID-19 response has provided a grant of €10 million (US$11 million) to CCRIF for premium support and increasing coverage for its Caribbean members,” CCRIF noted in a statement.
“This financial assistance to CCRIF is channeled through the EU Regional Resilience Building Facility, managed by the Global Facility for Disaster Reduction and Recovery (GFDRR) and the World Bank. The GFDRR, the World Bank and CCRIF will continue efforts to secure further potential discounts to CCRIF member countries.”
CCRIF SPC stated that the EU-funded support available for each member country would provide at least a 26 percent discount on total gross premium or an increase in policy coverage under a member country’s CCRIF parametric insurance policies.
“This is in addition to the discounts that CCRIF also is providing: five percent discount on gross premium for tropical cyclone coverage and a further discount of 15 percent on additional coverage purchased by members for increased tropical cyclone and/or earthquake coverage for the 2020/21 policy year,” the statement revealed.
“Member countries have the option of utilizing the EU-funded discount during the 2020/21 and 2021/22 policy years. The decision to allow for use of the funding in 2021/22 is based on projections of low or negative growth in Caribbean countries next year, which undoubtedly will have an impact on their fiscal space.
“While CCRIF over the years has received financial support from as many as 12 bilateral and multilateral development partners, this is the first time that support is being provided to all members simultaneously en bloc for premium support. The EU has been one of CCRIF’s development partners from its inception in 2007, having contributed to a multi-donor trust fund that enabled the initial capitalization of CCRIF. Again in 2014, the EU contributed to the capitalization and development of new parametric insurance products for current and potential members of CCRIF and facilitated the entry of Central American countries and additional Caribbean countries to join the facility.”
The Bahamas had three tropical cyclone policies and three excess rainfall policies with CCRIF last year, each covering a section or zone of the archipelago – northwest, southeast and central.