The Government of Grenada has renewed its insurance policies with the Caribbean Catastrophic Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC) ahead of the 2023 Hurricane Season.
CCRIF SPC, which provides parametric insurance coverage against natural hazards such as hurricanes and earthquakes, has been operating since 2007, with Grenada being a founding member.
Grenada currently holds 4 policies: Tropical Cyclone, Excess Rainfall, Earthquake and the Caribbean Ocean and Aquaculture Sustainability Facility (COAST). The Tropical Cyclone, Excess Rainfall and Earthquake policies will ensure a financial payout to Government to aid in the recovery process should Grenada experience an event severe enough to trigger the policy according to CCRIF SPC’s models. In the case of the COAST policy, coverage is provided to fisherfolk against losses due to “bad weather” and direct damage to fishing vessels, equipment and infrastructure caused by tropical cyclones (wind and storm surge). The COAST provides ‘livelihood protection” payments directly to fisherfolk if the policy is triggered.
With the existing policies expiring on 31 May 2023, the Government has elected to renew coverage effective 1 June 2023 for one year with Gross Premiums amounting to US$1.5 million. Through support from the European Union, the World Bank and CCRIF SPC, Grenada was able to secure discounts on its Tropical Cyclone and Excess Rainfall policies resulting in total Net Premiums of US$1.2 million. The Government expresses its appreciation for the premium support provided and encourages other agencies to provide similar assistance to Caricom countries which are disproportionately affected by severe hazards due to the effects of climate change.
With this policy renewal, Grenada can receive a maximum payout of US$42.3 million in the event of a Tropical Cyclone severe enough to trigger the policy. Maximum payouts for Excess Rainfall and Earthquake events are US$ 4.4 million and US$ 4.1 million, respectively, while total COAST payouts can reach US$ 1 million. The quantum of the payout will depend on the magnitude of the event and the modelled loss as determined by CCRIF SPC.
CCRIF Insurance coverage is an integral part of Government’s Disaster Risk Management Strategy to cater for largely catastrophic events. Other mechanisms, such as the Catastrophe Deferred Drawdown Option (CAT-DDO) and the Contingency Fund financed through CBI receipts, are additional disaster risk financing options available to Government to respond in the event of a natural disaster.
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