|CCRIF, ACS sign risk insurance MOU |
VERNE BURNETT Thursday, September 7 2017
Officials of the Caribbean Catastrophe Risk Insurance Facility (CCRIF), are looking closely at the damage that may be caused by the passage of Hurricane Irma among its member countries in the Caribbean, according to the CCRIF’s chief executive officer, Isaac Anthony. The Category 5 hurricane was expected to leave a trail of devastation along the northern Caribbean.
As he signed a Memorandum of Understanding (MOU) with the Association of Caribbean States (ACS) at the ACS Secretariat, Sweet Briar Road, St Clair, on Monday during the formal opening of the 25th meeting of the ACS’ Special Committee for Disaster Risk Reduction, two days before the Hurricane barrelled across islands in the northern Caribbean, Anthony said one of the strengths of the CCRIF was its ability to make payments within 14 days to territories hit by natural disasters.
Anthony said that the facility was established in 2007 and seven years later it was restructured to facilitate its expansion into new products and geographic areas. He said it is the world’s first regional fund using parametric insurance, a type of insurance in which payout is triggered when specific conditions, or parameters, are met.
Because the parameters are already specified, experts say no loss adjusters are needed, allowing for speedy payments, and Anthony said the CCRIF has consistently provided payments within 14 days of an event.
Since 2007, Anthony said, CCRIF has made 22 payouts to ten member governments totalling US$70 million. Following the passage of hurricane Matthew last year, CCRIF paid US$29.2 million to four member countries affected by that hurricane: Haiti, Barbados, St Lucia and St Vincent and the Grenadines. He said the majority of the payment – US$23.4 million – went to Haiti under its Tropical Cyclone policy which surge and its Excess Rainfall policy Over the years, the facility has entered into MOUs with eight organisations, including the Caribbean Disaster Emergency Management Agency (CDEMA); the Organisation of Eastern Caribbean States (OECS); the University of the West Indies (The UWI); the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) and the UWI Seismic Research Centre.
Anthony added that immediate access to liquidity is critical for governments following a disaster, for, while the international community provides relief, those funds are often slow to be released, taking as many as six to 12 months.
Government borrowing and reallocation of funds in their budgets also takes time and smaller governments such as those in the Caribbean and most of the Small Island Developing States (SIDS), with their high debt burdens, can no longer afford to self-finance disaster risk. He said the facility is an excellent financing option for the region in which countries can invest in national catastrophic risk insurance to assist in covering the cost of recovery from natural disasters, noting that the CCRIF operates as a not-for-profit mutual organisation and all the residual profits made by the facility goes back to members.
Signing for the ACS was its Secretary General Dr June Soomer, who welcomed the initiative, saying that the ACS works closely with all its partners.
During the meeting, the ACS’ director of Transport and Disaster Risk Reduction, Arturo Lopez-Portillo, presented a report on the various projects being undertaken by the ACS in Trinidad and Tobago and the region to improve the readiness of various institutions to deal with natural disasters, as well as the organisation’s work programme for 2017-2018 and beyond.
However, Soomer said that while the ACS is involved in several projects to help the region build capacity to prepare for storms and hurricanes, “We think that we can do a little more because our aim is to help countries rebuild better and if we are able to move into these countries very quickly when they are rebuilding (we can) show them what standards they should use.” She hastened to add that because of the number of hurricanes which have hit the region over the years, the countries have very good systems in place. “But we want to see fewer lives lost. We have countries where people are still dying during a storm and one of the things we want to insure is that we give them the information, we help them to build the capacity to make sure that we have that impact on the ground during a storm.” She said the ACS works very closely with the civil defence system in Cuba which she said was very good, reflecting that she could not remember the last time someone died in a storm in Cuba because of the methods that they use. She said the ACS wanted to share some of those techniques with its member states. The people of the greater Caribbean are right now living through the torrential rainfall brought by hurricanes, tropical storms and tropical depressions, she noted.