by Nisha Paul
- CCRIF provides insurance payouts when specific hazard conditions are met
- Following Hurricane Beryl, Grenada received US$44.04 million (about EC$118 million) from CCRIF
- Grenada secured a US$20 million contingency line of credit from World Bank
Grenada will spend over US$2 million this year to insure itself against hurricanes and other natural disasters, as the country strengthens its financial defences in a region where a single storm can erase years of economic gains.
The payment renews coverage under the Caribbean Catastrophe Risk Insurance Facility (CCRIF), a regional risk pool designed to provide rapid payouts when hurricanes, earthquakes or extreme rainfall events cross predefined thresholds.
Permanent Secretary in the Ministry of Finance Mike Sylvester said the premium has risen from about US$1.8 million last year, reflecting recent disaster activity in the Caribbean. “You will see that that premium has increased, and of course, that in itself is expected,” he said. “Years before we had (Hurricane) Beryl in Grenada in 2024, and we also had Melissa in Jamaica in 2025, so once there are events and claims and so on, the insurance usually goes up.”
He said the cost is significant but unavoidable in a region repeatedly exposed to climate shocks. “It’s a significant cost to us, and it’s something that we have to maintain going forward as we continue to build resilience and ensure we can protect lives and livelihoods in the event of a natural disaster,” Sylvester said.
CCRIF is a parametric insurance mechanism that provides payouts when specific hazard conditions are met, allowing governments to access liquidity quickly after disasters. The value of that system is underscored in recent regional events.
Following Hurricane Beryl, Grenada received a total of US$44.04 million (about EC$118 million) from CCRIF across 3 parametric insurance policies within 14 days. The bulk came from the tropical cyclone policy (US$42.4 million), with additional support from fisheries (US$1.1 million) and excess rainfall coverage (US$549,000).
Jamaica also received about US$91.9 million in CCRIF payouts following Hurricane Melissa in 2025, with funds released within 15 days. The disbursement included US$70.8 million under its tropical cyclone policy and US$21.1 million under excess rainfall coverage.
Together, the figures highlight both the speed and the limits of parametric insurance in small island economies, where liquidity can support recovery but cannot fully absorb the cost of major disasters.
Forecasts point to a less active 2026 Atlantic hurricane season, Sylvester noted, but he cautioned that even a quieter outlook offers little comfort since “all you need is one major event to create serious problems for us.” He said that alongside the insurance coverage, Grenada has secured a US$20 million contingency line of credit from the World Bank under a Catastrophe Deferred Drawdown Option (CAT-DDO), which can be accessed immediately after a disaster or public health emergency. “We have secured as of today US$20 million with the World Bank, and that money is available as we speak,” Sylvester said on the Government Information Service (GIS) programme Let’s Talk Finance.
The government is also building domestic buffers through the National Contingency Fund, into which 10% of monthly National Transformation Fund (NTF) receipts have been deposited since July 2023. Held at the Eastern Caribbean Central Bank (ECCB), it now stands at just over EC$61 million, according to Sylvester. Together, the contingency fund and World Bank facility provide about EC$115 million in combined emergency financing capacity.
CCRIF currently provides coverage for tropical cyclones, earthquakes, excess rainfall, fisheries and selected utility risks. Utility providers such as the National Water and Sewerage Authority (Nawasa) and Grenada Electricity Services Ltd. (Grenlec) maintain separate arrangements.
Officials are also exploring whether disaster protection can extend further into the wider economy, particularly tourism and small businesses, which remain highly exposed to storm damage.
“The hotel sector is one of the major sectors in the economy that, in the event of a disaster, can sort of cripple the economy,” Sylvester said.
Grenada’s approach reflects a wider Caribbean shift toward “risk layering” combining insurance, contingency credit and reserve funds to reduce fiscal shock after disasters.
“It’s not like you can stop these events,” Sylvester said. “What you want to do is bounce back better.”
But the rising cost of protection raises a harder question — how long can small economies continue scaling disaster financing faster than their revenues grow?
