CCRIF SPC and World Bank issue ‘pioneering’ parametric fisheries insurance to Grenada and Saint Lucia

A parametric fisheries insurance policy for Carribean governments, described as “pioneering” by the issuing body, has been taken up by the authorities of Grenada and Saint Lucia.

CCRIF SPC (Carribean Catastrophe Risk Insurance Facility) and the World Bank issued the two governments with the Caribbean Oceans and Aquaculture Sustainability Facility (Coast) policy, which covers people working in the fishing industry for losses caused by weather-related events. The US State Department has given initial funding for Coast.

In a statement, CCRIF SPC said the “unique” policy was “another in a list of innovative parametric insurance products”, which it provides to Caribbean and Central American governments.
“This parametric insurance product is unique – it incorporates a livelihood protection component (akin to microinsurance) and a tropical cyclone component (sovereign insurance),” the statement said. “The Coast product provides coverage for losses caused by ‘bad weather’ on fisherfolk and for direct damages caused by tropical cyclones (wind and storm surge) to fishing vessels, fishing equipment and fishing infrastructure. In this case, ‘bad weather’ is defined as occurrence of high waves and heavy rainfall throughout the policy year.”

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.

Under the parametric policy, payouts are made based on a pre-defined level of wave height, rainfall, wind or storm surge and their impact. “Therefore, 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.”

The facility 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.

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