Download Presentation of CCRF - UN

The Experience of CCRIF SPC
Second Committee Special Event
“A crisis mitigation and resilience building mechanism for LDCs, LLDCs and SIDS”
Isaac Anthony
Chief Executive Officer, CCRIF SPC
October 30, 2015
1
CCRIF is an
example for
successful crisis
mitigation and
resilience building
mechanisms that
could be
transferred to
LDCs, LLDCs and
SIDS
2
CCRIF is the world's first multi-country risk pool based on parametric
insurance and has been providing parametric catastrophe insurance for
Caribbean governments since 2007 – offering hurricane, earthquake
and – since 2013 – excess rainfall coverage.
The facility quickly provides financial liquidity when a country’s policy is
triggered – providing payouts within 14 days after an event. Since
2007, CCRIF has made 13 payouts totalling approximately US$38
million to 8 member governments.
In 2014, the facility was restructured into a segregated portfolio
company (SPC) to facilitate offering new products (for example the
excess rainfall product) and expansion into new geographic regions. It
is now named CCRIF SPC.
CCRIF expanded to include countries in Central America through a
partnership with COSEFIN when they signed a memorandum of
understanding in April 2015 to govern the expansion. Nicaragua
became the first Central American member of CCRIF.
3
How CCRIF’s Parametric Insurance Products
Work
Parametric
insurance
disburses
funds
based on
the
occurrence
of a predefined
level of
hazard and
impact.
Policy triggered on the basis of exceeding a preestablished trigger event loss
Estimated based on wind speed and storm surge
(tropical cyclones), ground shaking (earthquakes),
rainfall amount (excess rainfall)
Hazard levels applied to pre-defined government
exposure to produce a loss estimate.
Payout amounts increase with the level of modelled
loss, up to a pre-defined coverage limit
CCRIF makes payouts within 14 days after an event
4
Benefits of CCRIF Model
Pooling of risk across a wide geographical area provides:
• excellent diversification
• pooling into a single reinsurance transaction improves access to and
pricing from global markets
• parametric policies allow total objectivity/ transparency and rapid
payouts (14 days after an event)
Pricing based on technical risk avoids cross-subsidization
Parametric insurance avoids moral hazard, so it can work
in full synergy with risk reduction and other tools as part
of a holistic catastrophe risk management programme.
5
Lessons Learned
Keeping premiums low
• Risk pooling
• Providing discounts and bundling products when possible
Being flexible and responsive to members’ needs
• Developing new products
• Providing preferable policy options (e.g. lower attachment points)
Increasing understanding of CCRIF products
• Leads to informed decision making
Engagement with donors
• Frequent interaction
• Sourcing funding for new products
• Support for most disadvantaged countries
6
Supporting Policies and Actions
• National development plans
• including strategies for hazard risk
reduction and adaptation to climate
change
• Economic planning and
macroeconomic policy
• Incorporating climate change scenarios
• Environmental Management and
Biodiversity Conservation Plans
• Transformative infrastructure
• Long-term finance strategies
• building resilience against catastrophic
events
• Comprehensive Disaster
Management
• Risk mitigation and risk transfer
• Linkages between developed and
developing countries
7
Thank You
CCRIF SPC
[email protected]
www.ccrif.org
Follow @ ccrif_pr
CCRIF_SPC
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