Grand Cayman, Cayman Islands, July 3, 2024. CCRIF SPC made a payout on July 1, 2024, of US$6,376,184 to the Government of Guatemala on its excess rainfall policy following heavy rains that occurred during June 13th-19th. CCRIF expresses sympathy with the Government and people of Guatemala for the loss of life and impacts on communities and infrastructure caused by this event. CCRIF trusts that the payout will provide a measure of financial support to assist the Government in its most urgent relief efforts. As CCRIF makes this payout, it is actively monitoring Tropical Cyclone Beryl, which is affecting several of our members in the Caribbean.
This payout represents the Government of Guatemala’s full payout under its excess rainfall (XSR) policy, meaning that the policy has reached its coverage limit. Due to the increasing frequency, intensity, and unpredictability of climate-related hazards, CCRIF has been developing policy features (or endorsements) to enhance its main parametric insurance policies. One such feature is the Reinstatement of Sum Insured Cover (RSIC), which was introduced by CCRIF for tropical cyclone and earthquake policies as far back as 2017 when the Facility celebrated its 10th anniversary. CCRIF made the RSIC available for XSR policies for the first time for the 2024/25 policy year. The RSIC allows a member government’s policy to be reinstated if it reaches the coverage limit before the end of the policy year. Guatemala purchased the RSIC under its XSR policy – at a cost that is a small fraction of the main policy premium. This means that, following the triggering of the policy to its limit, the XSR policy was immediately reinstated to the full coverage limit of US$6.38 million. Therefore, Guatemala will continue to be financially protected against excess rainfall events until the end of the policy year on May 31, 2025, or until the coverage limit of the policy is reached again as a result of one or more rainfall events prior to that date.
CCRIF members recently renewed their insurance policies for the 2024/25 policy year, which began on June 1st. CCRIF CEO, Mr. Isaac Anthony, stated, “For 2024/25, total coverage has increased by 10 per cent compared with last year. This demonstrates our members’ commitment to investing in financial protection against natural hazards.”
CCRIF is the Caribbean and Central America’s development insurance company and is also a risk pool. By operating as a risk pool, CCRIF offers its members several benefits. The risk pooling mechanism allows CCRIF to offer parametric insurance policies with premiums that are 35-50 per cent lower than if members individually tried to access this type of coverage from the reinsurance markets. These lower costs of coverage are possible as CCRIF can pool diverse exposures, retain some risk and transfer excess risk to the capital and reinsurance markets. The risk pool has also enabled CCRIF to achieve financial and operational efficiencies, which enables members to benefit from relatively good and highly competitive premium prices, as well as premium discounts.
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