The Caribbean Catastrophe Risk Insurance Facility

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The Caribbean Catastrophe RiskInsurance Facility
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Caribbean Catastrophe Risk Insurance
InitiativeA World Bank initiative at the
Request of the CARICOM Heads
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Natural disasters may become more severe
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CARICOM Countries

• High exposure to a variety of adverse natural
  events
• Limited economic resilience to disasters because
  of small size and limited borrowing capacity
• Dependence on financing from international donors
  to finance post-disaster needs
• Limited access to insurance and reinsurance
  markets, and limited resources to do so

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The liquidity gap often emerges following a
disaster

• The primary objective of this Facility is to
  provide immediate liquidity to the affected
  country

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Session 2 Risk Modeling
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Session 3 Insurance Vehicle
Reinsurance/ART(Purchased on international
financial markets)
Country 1
Country 2
Premium
Payout
Initial donor contribution
Country 3
Insurance Premium
Growth
Country 4
Initial donor contribution
Insurance Payout
Country 5
Reserves
Initial donor contribution
Country 6
Country 7
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Session 4 Hypothetical Case
WIND SPEED SURGE Calculated for each Location Vw
f(Pc, d, regional topography) S f( Vw,
elevation, bathymetry)
Local Site Factors (Terrain/Soil)
Distance (d)
GROUND MOTION Calculated for each
Location PGAf(M1,d,regional geology) MMI
f(PGA, soil)
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Session 5 Panel Discussion with Participating
Donors

• Disaster Management Programs in the Region
• Setting up the Facilitys reserve fund
• Financing Insurance Premium

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Preparation Timeframe

• Regional Introductory Workshop (today)
• May July 2006
• Tailoring of coverage for each country
• Establishment of the Facility operational
  structure
• September 2006
• Commitment of member countries
• Pledges from donors
• Registration of Facility and reinsurance
  placement

Objective Hurricane Season 2007