This week, the Government of Grenada was expected to receive its first ever pay out from the contributory Caribbean Catastrophe Risk Insurance Facility (CCRIF), to the tune of US$44 million (EC$118 million) to aid in recovery efforts following the devastating impact of Hurricane Beryl.
The category (4) hurricane caused near-total destruction, obliterating 90% of buildings and agriculture on the islands of Carriacou and Petite Martinique, and leaving a trail of devastation in the northern part of mainland Grenada.
The CCRIF, based in the Grand Cayman Islands, announced on Wednesday that all policies for Grenada have been triggered.
The bulk of the payout, amounting to US$42,425,110.00 will be disbursed to the government under the tropical cyclone (TC) policy.
This payment is the largest single payout by the CCRIF since its inception in 2007, surpassing the previous record set by Haiti, which received just under US$40 million following the 2021 earthquake.
The CCRIF currently offers six (6) parametric insurance products for Tropical Cyclones, Earthquakes, Excess rainfall, For the Fisheries Sector, Electric Utilities for Transmission and Distribution and Water Utilities to help to mitigate the short-term cash flow problems small developing economies suffer after major natural disasters.
Its parametric insurance mechanism allows for rapid payouts to help members finance their initial disaster response and maintain basic government functions after a catastrophic event rather than after damages are assessed.
CCRIF CEO Isaac Anthony highlighted the significance of this payout for Grenada, noting it is the first time the country has received funds from the facility.
He praised the Grenadian government for its foresight in maintaining insurance coverage despite not having received payouts in the past.
“The government has always understood the importance of financially protecting the economy in case a disaster strikes, as it would never want to see a repeat of Hurricane Ivan,” he said.
Anthony also emphasised the value of parametric insurance, likening it to health insurance in terms of its role in safeguarding against severe consequences.
“We do not want to be negatively impacted by natural hazards and face disasters. However, with CCRIF’s parametric insurance, the moment we really need it, it is available within 14 days of a triggering event,” the CCRIF CEO remarked.
Prior to Hurricane Beryl, CCRIF had made 65 payouts totalling US$274 million to 17 member countries.
The organisation is now expected to make 10 payouts exceeding US$75 million in the next few days, raising the total to approximately US$350 million.
Other recipients include St. Vincent and the Grenadines, set to receive US$1.8 million, and Trinidad and Tobago, with a payout of US$372,752 for impacts on Tobago.
Jamaica will also receive payouts, with details expected to be announced by the end of the week.
Coverage through CCRIF can be purchased for up to US$150 million per peril.
The facility, developed under the technical leadership of the World Bank and funded by a grant from the Government of Japan, is a segregated portfolio company owned, operated, and registered in the Caribbean.
It was capitalised through contributions from a Multi-Donor Trust Fund, membership fees from participating governments, and donations from the governments of Canada, the UK, France, Ireland, Bermuda, and the Caribbean Development Bank.
As the first multi-country risk pool in the world, CCRIF has pioneered the development of parametric insurance policies backed by both traditional and capital markets, providing a crucial financial safety net for small developing economies facing major natural disasters.