The chief executive of the Caribbean Catastrophe Risk Insurance Facility (CCRIF) has dispelled speculation that the organisation is moving away from parametric triggers while confirming it is close to launching new products.
Speaking yesterday evening (26 June) at a Pool Re-sponsored event - reducing the protection gap for catastrophic risk – at Cass Business school, Isaac Anthony, the chief executive of the organisation said the CCRIF intended to “stay parametric, for now”.
Anthony also revealed that the organisation was exploring opportunities that expand its breadth of coverage.
“We’re looking at products that can scale up our existing provisions,” Anthony said.
He explained that the CCRIF wanted to create specific products for government assets based on parametric triggers.
Anthony pointed to schools, hospitals and social services as all being potential benefactors of this new form of cover.
In addition to government assets, Anthony said the risk pool was also exploring new products for housing in the Caribbean in the wake of a catastrophic drought as well as an agricultural product and cover for fisheries.
Anthony stressed the benefits the organisation brings to the region following a catastrophe in aiding communities rebuild their infrastructure.
“One dollar straight after a disaster is worth far more than one dollar six or nine months later,” he said.
“Some people say it’s a drop in the ocean - I say maybe it is, but it’s a big drop,” Anthony added.
In the wake of Hurricanes Irma and Maria that ripped through swathes of the Caribbean last year Anthony said member countries had purchased more coverage than in previous years.
The CCRIF is the World Bank sponsored risk pool that provides cat cover to its Caribbean members based on parametric triggers.
In contrast to traditional insurance products based on an indemnity of loss, parametric triggers occur regardless of loss when an agreed trigger occurs.
The organisation was formed in the aftermath of the devastation caused by Hurricane Ivan in 2004 and began incepting risks in 2007. Each member pays an annual premium directly related to the amount of risk it transfers to CCRIF and can purchase coverage up to a limit of approximately $100mn for three different hazards - cyclones, earthquakes and excess rainfall.
The CCRIF paid out $50.7mn over the course of last year’s Hurricane season - making 2017 the highest year for CCRIF claims.
Since its formation in 2007, the CCRIF has paid $120mn to its members.
Anthony was speaking at an event to launch professor Paula Jarzabkowski’s research paper – ‘Between State and Market: Protection Gap Entities and Catastrophic Risk’.
Speaking at the launch, Jarzabkowski said Protection Gap Entities (PGEs) such as CCRIF have the ability to carve a place between the state and insurance market in developing solutions and schemes that can mobilise global (re)insurance capital in the aftermath of disaster.
She said that PGEs – both in developed and developing economies – can play a significant role in managing risk and alleviating the financial consequences of disaster.