Project profile — Caribbean Catastrophe Risk Insurance Facility

• America, regional (100.00%)

• Reconstruction Relief And Rehabilitation: Reconstruction relief and rehabilitation (73010) (100.00%)

• Gender equality (not targeted)
• Environmental sustainability (cross-cutting) (not targeted)
• Participatory development and good governance (not targeted)
• Trade development (not targeted)
• Biodiversity (not targeted)
• Climate change mitigation (not targeted)
• Climate Change Adaptation (not targeted)
• Urban issues (not targeted)
• Desertification (not targeted)
• Children's issues (not targeted)
• Youth Issues (not targeted)
• Indigenous Issues (not targeted)
• Disability (not targeted)
• ICT as a tool for development (not targeted)

Following the devastation caused by natural disasters in the Caribbean in 2004, the Caribbean Community (CARICOM) member states asked the World Bank for assistance with gaining access to affordable and effective disaster risk financing arrangements. In response, the World Bank developed an insurance mechanism called the Caribbean Catastrophe Risk Insurance Facility (CCRIF). The CCRIF allows Caribbean countries to pool natural disaster risks, reduces the cost of insurance, and ensures swift payment of claims. It allows CARICOM governments to purchase insurance coverage akin to business interruption insurance that provides them with immediate liquidity in the event of a hurricane or earthquake. Because of the speed at which claim payments are processed, the instrument is particularly useful for financing immediate post-disaster recovery needs while the affected country seeks funds from other sources for longer-term reconstruction.

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Results achieved as of the end of the project (March 2012) include: All 16 participating countries and territories have insurance policies from the Caribbean Catastrophe Risk Insurance Initiative (CCRIF). Seven countries received eight pay-outs from the CCRIF, totalling more than US$32 million, generally within two weeks of the disaster's occurrence (Dominica and Saint Lucia after an earthquake in 2007; Turks and Caicos Islands after a hurricane in 2008; Haiti following the 2010 earthquake; Anguilla after a hurricane in 2010; and Barbados, Saint Lucia and St.Vincent and the Grenadines following a hurricane in 2010). The 16 members have signed up to a total of 29 insurance policies each year. Based on operational experience and due to the overall prudence of CCRIF's financial position and risk assessment, premiums have been reduced three times. The CCRIF developed a real-time forecasting system for cyclones and has begun the development of a new insurance product for protection from excess rainfall. The CCRIF also launched a technical assistance program for Caribbean institutions. The program also funded member countries’ officials with bursaries for academic study and for attendance at technical workshops.

• Proactive disclosure