Premiums down; attachment point decreased to one in 15 year events
The Caribbean Catastrophe Risk Insurance Facility (CCRIF) has announced the approval of several new measures to be implemented for the 2008 renewal period.
The changes are all meant to further satisfy the objective of the CCRIF member governments, which is to provide a way to fill the liquidity gap after a natural catastrophe.
As passed by the CCRIF board of directors, premiums charged to participating governments will decrease by 10%, the minimum attachment point available for hurricane policies will decrease from coverage provided for one in 20 year events to one in 15 year events.
Maximum available coverage will increase from $50m to $100m per peril and when a policy is triggered, a minimum payout will be made equivalent to the amount of the annual policy premium. Payouts will also be speeded up so that legitimate claims can be settled in as little as 14 days.
Honourable Audley Shaw, minister of finance and the public service in Jamaica, was one of the leading advocates for changes in the policy going forward.
"Caribbean nations must implement measures to mitigate risk posed by natural disasters in order to meet their development objectives. Still, these measures must be useful and affordable. The implementation of the suggestions made by myself and other Caribbean member governments to provide wider hurricane coverage for more frequent events, as well as the reduction in premiums, means that member governments now have access to a more comprehensive facility for the overall benefit of its citizens," Minister Shaw said.
As a Caribbean Facility ? the CCRIF was developed at the request and with the vigorous support of CARICOM heads of government ? the CCRIF has a responsibility to remain relevant and responsive to the member governments it was designed to serve.
"As the first regional parametric insurance solution, the CCRIF is a work in progress. In our first year we've already made payouts to two Caribbean governments, Dominica and St. Lucia. We have listened closely to our member governments to ensure the usefulness and sustainability of the Facility," Dr Simon Young, CEO of Caribbean Risk Managers and Supervisor of the Facility said.
The CCRIF is the first multi-country risk pool in the world, and is also the first insurance instrument to successfully develop a parametric policy backed by both traditional and capital markets.
It is a regional insurance fund for Caribbean governments designed to limit the financial impact of catastrophic hurricanes and earthquakes to Caribbean governments by quickly providing financial liquidity when a policy is triggered.
Sixteen countries count themselves members of the fund: Anguilla, Antigua & Barbuda, Bahamas, Barbados, Belize, Bermuda, Cayman Islands, Dominica, Grenada, Haiti, Jamaica, St. Kitts & Nevis, St. Lucia, St. Vincent & the Grenadines, Trinidad & Tobago and the Turks and Caicos Islands.