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The Caribbean Catastrophe Risk Insurance Facility (CCRIF) has worked with the World Bank to structure a catastrophe bond that would transfer some of its risks into the capital markets.
Full details are yet to emerge but the deal is believed to be worth $30 million and will transfer hurricane and earthquake risks impacting its 16 member island nations.
The World Bank has a dedicated bond issuance platform called the Global Debt Issuance Facility and it looks likely that this platform has been used for this deal.
Still reeling from the effects of Hurricane Sandy, the Caribbean region has taken a number of steps in recent years to become increasingly proactive with its disaster management, and this cat bond seems to be the latest move to allow it to cope with large catastrophe losses.
CCRIF has also been working for several years now to develop an excess rainfall product which will address the losses associated with heavy rainfall and will be available to all Caribbean countries. The product is being developed in partnership with global reinsurer Swiss Re.
Sixteen governments are currently members of CCRIF: Anguilla, Antigua & Barbuda, Bahamas, Barbados, Belize, Bermuda, Cayman Islands, Dominica, Grenada, Haiti, Jamaica, St Kitts & Nevis, St Lucia, St Vincent & the Grenadines, Trinidad & Tobago and the Turks & Caicos Islands.
CCRIF, World Bank, catastrophe bond, hurricane risk, capital markets