Presented by Isaac Anthony, Chief Executive Officer, CCRIF SPC at the Pacific Regional Dialogue on Financial Management of Climate Risk (26-28 June 2017, Apia)

1. Aims, Experiences, Performance and Lessons Learned
The Caribbean Catastrophe Risk Insurance Facility
Isaac Anthony, Chief Executive Officer, CCRIF SPC
PACIFIC REGIONAL DIALOGUE ON FINANCIAL MANAGEMENT OF CLIMATE RISKS
June 26, 2017

2. CCRIF was born 10 years ago….
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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.
We are pleased that other regions of the world have been able to adopt
and adapt aspects of CCRIF’s operations and created similar facilities.
The facility quickly provides financial liquidity when a country’s policy is
triggered – providing payouts within 14 days after an event.

3. How CCRIF Got Started?
Prompted by Hurricane Ivan which caused over 6 billion dollars’ worth of
losses across 9 countries in the Caribbean
Losses to Grenada and the Cayman Islands from Ivan were close to 200% of
their national annual GDP
Following Hurricane Ivan, CARICOM Heads of Government requested
assistance from the World Bank in developing a risk transfer mechanism for
Caribbean governments.
Funding for CCRIF came from the Japanese Government, and was
capitalized through contributions to a multi-donor Trust Fund by the
Government of Canada, the European Union, the World Bank, the
governments of the UK and France, the Caribbean Development Bank and
the governments of Ireland and Bermuda, as well as through membership
fees paid by participating governments

4. • The Caribbean Catastrophe Risk Insurance
Facility (CCRIF) was set up as a captive
insurance company which is owned by a
trust with the shares being held by a trustee
(a legal firm in Cayman) and was approved as
a Class B Licensed Insurer by the Cayman
Islands Monetary Authority (CIMA) on 23
May 2007.
• CCRIF was set up as a captive because of the
nature of the service it provides and the
insurance products that it sells, which attract
risks that are priced too high by the
traditional market. As such, a captive for
CCRIF provides a bespoke insurance solution
that effectively supports the Facility’s overall
risk management strategy.
• CCRIF has 17 members: 16 from the
Caribbean and 1 from Central America.
CCRIF
Governance
Framework

5. From CCRIF to CCRIF SPC
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.
We are now named CCRIF SPC.
By establishing segregated portfolios, CCRIF is able
to prevent the cross-subsidization of risk from one
region to another, ensuring that each region’s risk
will be based on the particular risk profiles of the
countries in that region.
We are in the process of developing 3 new products – a drought product which we
expect to make available in our next policy year 2018 as well as products for the
fisheries and agriculture industries. 5

6. CCRIF is a Successful Model…Receiving
Worldwide Attention Since 2007
CCRIF is recognized as a
best practice example of
a risk transfer
mechanism that can be
an essential tool for
disaster financing, which
assumes greater
significance in a changing
climate.
CCRIF is designed
particularly to cover tail
events, i.e. those that
are unlikely to occur but
have significant
economic
consequences.
The value of insurance in
general, and catastrophe
insurance in particular, is greater
the further towards the tail the
covered risk is; indeed,
insurance is not an efficient
financial risk management
mechanism for events that
happen every year or two.
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7. Why Caribbean and Central American Governments are
Pursuing Catastrophe Risk Insurance?
3 Clear
Reasons
Governments are typically responsible for large portfolios of public
infrastructure assets subject to risk
To guarantee sufficient capital for emergency relief and assistance to
affected households, businesses and communities. If governments
lack the necessary infusion of post-disaster capital to rebuild critical
infrastructure, restore homes and provide humanitarian assistance,
indirect costs can greatly surpass the direct losses of a disaster
Developing countries have a higher propensity for post-disaster
resource deficits. Governments of developing countries typically
must divert from their budgets or from already disbursed
development loans to finance post-disaster expenses, also relying on
new loans and donations from the international community
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8. CCRIF is a Successful Model…Receiving
Worldwide Attention Since 2007
The World Bank conservatively estimates that insurance obtained through CCRIF is
about half the cost of coverage a member country could obtain on its own. 8
The Facility aggregates disaster risks
across the Caribbean as well as disaster
risks across Central America using
segregated portfolios, achieving the kind
of risk diversification and spreading that
its members would not be able to attain
on their own. By pooling countries’ risks
into these segregated portfolios, CCRIF is
able to provide insurance at the
minimum price possible. CCRIF also
brings economies of scale for
administration and purchase of
reinsurance, and its capital enables CCRIF
to retain some risk, thus reducing the
reinsurance burden.

9. Uniqueness of CCRIF Policies
• Unlike indemnity insurance, CCRIF’s
parametric insurance products are
insurance contracts that make payments
based on the intensity of an event (for
example, hurricane wind speed,
earthquake intensity, and volume of
rainfall) and the amount of loss calculated
in a pre-agreed model caused by these
events.
• Parametric insurance enables payouts to
be made very quickly after a hazard event.
• CCRIF therefore represents a cost-
effective way to pre-finance short-term
liquidity to begin recovery efforts for an
individual government after a catastrophic
event, thereby filling the gap between
immediate response aid and long-term
redevelopment.

10. 10
Since its inception in 2007, CCRIF has now made a total of 22 payouts to 10
member governments totalling US$69 million, all within 14 days of the event.

11. Uses of CCRIF Payouts
Governments have used CCRIF funds to:
• “Keep the wheels of government
turning” (e.g. cover the salaries of
key emergency personnel)
• Repair critical infrastructure, e.g.
roads, bridges
• Build back critical infrastructure
e.g. drainage
• Institute mitigation measures e.g.
install meteorological data
collection equipment
• Provide general budget support
• Provide medicines and other care
• Support the agriculture sector
• Provide roofs and temporary
homes to vulnerable persons 11

12. Lessons Learned
over the 10 years
2007 - 2017

13. 13
Lessons Learned
Much of the success of CCRIF has
not been by chance. We have
based our operation on learning
lessons and on a culture of
continuous improvement as well
as projecting needs and
recognizing the dynamic and
ever-changing global
environment of which we are
part. There have been many
lessons learned that countries,
organizations and donors should
take into account in pursuance of
a similar facility. I will share the
main lessons with you.

14. Lessons Learned over the 10 years
2007 - 2017
Lesson 1
Consultations aid project
development and
underpin continuous
improvement
Lesson 2
Donor support is
invaluable
Lesson 3
Success depends heavily
on the relevant
knowledge and
experience of decision
makers
Lesson 4
Stakeholders’ interests
must be represented
Lesson 5
Stakeholder engagement
is a continuing objective
Lesson 6
Minimize non-essential
bureaucracy to lower
overhead costs and
product price
Lesson 7
Third-party monitoring
and evaluation can help to
broaden or streamline
organizational focus as
necessary
Lesson 8
Know your limitations

15. Final Words on
Lessons Learned
• Financial mechanisms such as CCRIF must
therefore not be seen as a panacea but rather a
complementary tool in addressing the much
broader issue of disaster management within
the state.
• An important theme in the sustainability of
such an innovative tool for risk management is
the avoidance of complacency and stagnation.
Constant communication, accountability,
evaluation and evolution are necessary to
maintain the relevance and reliability of the
mechanism. Decision makers must remain
creative in their desire to grow and expand the
worth of the tool to stakeholders while
remembering its initial mission and purpose.
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16. 16
Final Words…
CCRIF represents a truly innovative risk pooling scheme that
represents a paradigm shift in the way governments manage risk.
The CCRIF Story is a powerful way to demonstrate the linkages
between country disaster risk management strategies and risk
transfer and the linkages between risk transfer, poverty reduction
and economic growth.
We share the UN 2030 goals for sustainable development and the
importance of “leaving no one behind” in development.
• We effectively support the goals of promoting sustainable
economic growth, ensuring environmental, social and fiscal
sustainability and reducing poverty – as evidenced by
CCRIF’s mission statement: “A resilient Caribbean region
and beyond with optimised disaster risk management and
climate change adaptation practices supporting long-term
sustainable development”.

17. Thank You
CCRIF SPC
pr@ccrif.org
www.ccrif.org
Follow @ ccrif_pr
CCRIF_SPC
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