Grenada is one of the sixteen member governments of the Caribbean Catastrophe Risk Insurance Facility which have renewed their hurricane and earthquake insurance for the 2013/14 policy year that started 1 June 2013.
Since CCRIF’s inception in 2007 — and despite increasing economic and financial pressures — member countries have recognised the value of including CCRIF’s parametric hurricane and earthquake coverage in their national disaster risk management strategies.
This year was no different, especially given that the US National Oceanic and Atmospheric Administration (NOAA) predicts an active 2013 Atlantic Hurricane Season with more and stronger hurricanes than usual. For the six-month hurricane season, which began 1 June, NOAA stated there was a 70 percent likelihood of 13 to 20 named storms — well above the seasonal average of 12 named storms.
A news release from the CCRIF said that in light of the budgetary constraints felt by countries across the region, CCRIF sought again this year to minimise premium costs. For the 2013/14 policies, CCRIF provided a 25% discount on premiums because no payouts were made by CCRIF in 2012/13, resulting in an underwriting surplus for the organisation, which is run as a not-for-profit entity.
“Also, countries could apply a portion of their Participation Fee (a deposit paid when they initially became a CCRIF member) toward their premium payment and had the option to lower the minimum attachment point for tropical cyclones (hurricanes) from a fifteen-year to a ten-year return period,” said that statement which explained that these all led to a reduction in the effective cost of coverage to countries this year by at least 25% but in some cases up to 50%.
The Facility also added the new excess rainfall product to its portfolio of offerings to Caribbean governments for 2013/14. This product specifically covers extreme rainfall events, from both cyclonic systems and from non-cyclonic systems. It should be noted that rainfall is not included in CCRIF’s current hurricane policies, which trigger based on damage from wind and storm surge.
The release said that many countries have consistently expressed interest in excess rainfall coverage and in fact, the new product is of interest to countries which are not yet CCRIF members since they are not vulnerable to hurricanes or earthquakes but have significant extreme rainfall risk.