The Experience of CCRIF SPC Second Committee Special Event “A crisis mitigation and resilience building mechanism for LDCs, LLDCs and SIDS” Isaac Anthony Chief Executive Officer, CCRIF SPC October 30,

CCRIF is an example for successful crisis mitigation and resilience building mechanisms that could be transferred to LDCs, LLDCs and SIDS 2

CCRIF is the world's first multi-country risk pool based on parametric insurance and has been providing parametric catastrophe insurance for Caribbean governments since 2007 – offering hurricane, earthquake and – since 2013 – excess rainfall coverage. The facility quickly provides financial liquidity when a country’s policy is triggered – providing payouts within 14 days after an event. Since 2007, CCRIF has made 13 payouts totalling approximately US$38 million to 8 member governments. In 2014, the facility was restructured into a segregated portfolio company (SPC) to facilitate offering new products (for example the excess rainfall product) and expansion into new geographic regions. It is now named CCRIF SPC. CCRIF expanded to include countries in Central America through a partnership with COSEFIN when they signed a memorandum of understanding in April 2015 to govern the expansion. Nicaragua became the first Central American member of CCRIF. 3

How CCRIF’s Parametric Insurance Products Work Parametric insurance disburses funds based on the occurrence of a pre- defined level of hazard and impact. Policy triggered on the basis of exceeding a pre- established trigger event loss Estimated based on wind speed and storm surge (tropical cyclones), ground shaking (earthquakes), rainfall amount (excess rainfall) Hazard levels applied to pre-defined government exposure to produce a loss estimate. Payout amounts increase with the level of modelled loss, up to a pre-defined coverage limit CCRIF makes payouts within 14 days after an event 4

Benefits of CCRIF Model Pooling of risk across a wide geographical area provides: excellent diversification pooling into a single reinsurance transaction improves access to and pricing from global markets parametric policies allow total objectivity/ transparency and rapid payouts (14 days after an event) Pricing based on technical risk avoids cross-subsidization Parametric insurance avoids moral hazard, so it can work in full synergy with risk reduction and other tools as part of a holistic catastrophe risk management programme. 5

Lessons Learned Risk pooling Providing discounts and bundling products when possible Keeping premiums low Developing new products Providing preferable policy options (e.g. lower attachment points) Being flexible and responsive to members’ needs Leads to informed decision making Increasing understanding of CCRIF products Frequent interaction Sourcing funding for new products Support for most disadvantaged countries Engagement with donors 6

Supporting Policies and Actions National development plans including strategies for hazard risk reduction and adaptation to climate change Economic planning and macroeconomic policy Incorporating climate change scenarios Environmental Management and Biodiversity Conservation Plans Transformative infrastructure Long-term finance strategies building resilience against catastrophic events Comprehensive Disaster Management Risk mitigation and risk transfer Linkages between developed and developing countries 7

Thank You CCRIF SPC ccrif_pr CCRIF_SPC 8