I am very pleased to be here today
to deliver brief remarks on behalf of the Board and Management of CCRIF SPC on this occasion where we present to Ms. Thompson a CCRIF Scholarship valued at US$40,000 or J$5.2 million to pursue a Master of Science degree in Engineering Geology at the University of Leeds in the United Kingdom. Ms. Thompson, we congratulate you.
Becoming a CCRIF scholarship recipient is no easy feat and it involves a rigorous application process. Ms. Thompson is one of two young persons in the region to receive this scholarship this year – the other recipient is from Guyana. She is also the fourth Jamaican to have received this scholarship under the CCRIF Scholarship Programme and she was also fortunate to have received a CCRIF-UWI Scholarship for two years of her undergraduate studies valued at US$16,000 or J$2.2 million.
Permit me to say a few words about CCRIF, although I know that many of you are well aware of CCRIF and what we do.
Yesterday, September 12, we marked the 31st anniversary of the passage of Hurricane Gilbert which was catastrophic for our nation. Sixteen years later, Hurricane Ivan unleashed its wrath on the region causing billions of dollars of losses with the Cayman Islands and Grenada being severely impacted. CCRIF was created as an immediate response to Hurricane Ivan. In 2004, The Caribbean Community (CARICOM) Heads of Government approached the World Bank for assistance to design and implement a risk financing mechanism to support member governments and provide quick liquidity in the immediate aftermath of a disaster – within 14 days of an event. This marked the beginning of what would become the Caribbean Catastrophe Risk Insurance Facility, which was established in 2007 with 16 Caribbean governments as members. Since then, CCRIF – now known as CCRIF SPC – has expanded its membership to include Central America and other Caribbean countries and its current membership is 19 Caribbean governments and 2 Central American governments – and we will be adding a 3rd by the end of this month.
During CCRIF’s 12 years in existence, the Facility has demonstrated that disaster risk insurance can effectively provide a level of financial protection for countries vulnerable to tropical cyclones, earthquakes and excess rainfall. This year we launched a new product for the fisheries sector, called COAST, in collaboration with the World Bank and the US State Department. Since our inception in 2007, we have made 39 payouts totalling a little over US$150 million to 13 of our 21 member governments.
The latest payout was to The Bahamas following Hurricane Dorian which caused extensive damage to the islands of Grand Bahama and Abaco. Lives were lost and many persons are missing. We empathize with the people of The Bahamas and I wish to pause to observe a moment of silence for those who died. You would have also seen in the press that the country’s CCRIF Tropical Cyclone policy was triggered for a payout of US$10.9 million and CCRIF has already paid 50 per cent of this sum.
As you can imply from this, CCRIF was designed to provide a rapid infusion of liquidity after a natural disaster to be able to address immediate priorities and to support the most vulnerable. As the Deputy Prime Minster of The Bahamas said in the press this week, and I quote, “the Caribbean Catastrophe Risk Insurance Facility is worth it. The hurricane insurance is going to give us roughly $10.9 million which is more or less in line with what we expected”.
A rough assessment of the beneficiaries of the payouts over CCRIF’s 12 years of existence show that over 2.5 million persons in the Caribbean and Central America have benefitted from these payouts. The 13 governments that have benefitted have used the payouts to provide food, shelter and medicine for affected persons; stabilizing drinking water plants; providing building materials to the vulnerable to repair their homes; clearing and repairing critical infrastructure such as roads and bridges as a means of enabling movement and access in and out of communities; payment of government salaries for critical first responders to facilitate the injured being cared for; and support for the agriculture sector among others.
The parametric insurance that CCRIF provides is one of many disaster risk financing tools now available to governments. Others include catastrophe bonds, dedicated reserve funds, contingent credit facilities and I am sure Minister Clarke will add more to this list. These are all complementary tools and are applicable in different scenarios. CCRIF for example has been designed to address high impact low frequency events.
There is a part of the CCRIF Story that many are not aware of – the part that focuses on disaster risk management and reducing the vulnerability of the small island and coastal states that make up the wider Caribbean and Latin America region. CCRIF operates as a not-for-profit company. The profit or surplus is allocated in two ways – part goes to our member governments in the form of reduced premiums on policies purchased and the other part goes into a Technical Assistance (TA) Programme which has been designed to assist Caribbean countries deepen their understanding of natural hazards and catastrophe risk, and the potential impacts of climate change on the region. The TA Programme, launched in 2010, is designed to enable CCRIF to achieve its mission of assisting its member governments and their communities in understanding and reducing the socioeconomic and environmental impacts of natural catastrophes, while at the same time contributing to the long-term sustainability of the region.
The programme has three key components:
- The first focuses primarily on support for tertiary level scholarships as well as support for professional development programmes in the area of risk and disaster management.
- The second focuses on regional knowledge and capacity building, and involves on one hand, the development and implementation of strategic regional projects in support of disaster risk management (DRM).
- The final component is centered on support for local disaster risk management projects and programmes.