World Bank and Carribean Catastrophe Risk Insurance Facility issue innovative cover for Carribean fishermen
Carribean Catastrophe Risk Insurance Facility (CCRIF) SPC and the World Bank have issued Grenada and Saint Lucia with the Caribbean Oceans and Aquaculture Sustainability Facility (Coast) policy.
Coast, which will be of interest to Bermuda’s re/insurance community, covers people working in the fishing industry for losses caused by weather-related events. It provides coverage for losses caused by bad weather on fisherfolk and for direct damages caused by tropical cyclones, including wind and storm surge, to fishing vessels, fishing equipment and fishing infrastructure.
Bad weather is defined as occurrence of high waves and heavy rainfall throughout the policy year. Payouts are made based on a pre-defined level of wave height, rainfall, wind or storm surge and their impact, meaning payouts can be made quickly – within 14 days of the event to honour one of CCRIF’s core principles.
If a country’s policy is triggered, the funds will be provided by CCRIF to the ministry of finance, followed by a rapid transfer to the fisherfolk and other affected parties throughout the country’s fishing industry.
Coast said timely transfer of funds is made possible by defining the list of beneficiaries when the government starts the policy. It is designed to include beneficiaries from the fisheries value chain, including fishers, crew members, captains, boat owners, fish vendors and processors.
CCRIF SPC is a segregated portfolio company, owned, operated and registered in the Caribbean. It offers catastrophe insurance to Caribbean and Central American governments by quickly providing short-term liquidity when a parametric insurance policy is triggered. The facility claims to be “the world’s first regional fund utilising parametric insurance”, to sell earthquake, hurricane and excess rainfall catastrophe coverage with lowest-possible pricing to member governments. CCRIF was developed under the technical leadership of the World Bank and with a grant from the Government of Japan.
In a statement, CCRIF SPC said: “This parametric insurance product is unique – it incorporates a livelihood protection component (akin to microinsurance) and a tropical cyclone component (sovereign insurance).”
CCRIF SPC said the Caribbean was the “first region globally to develop and implement parametric climate risk insurance for the fisheries sector”, to protect the livelihoods of fishing communities and help to close the protection gap.
The US State Department has provided initial funding for Coast.
