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EU grant to reduce Caribbean countries’ insurance premiums

The European Union (EU) has provided US$11 million in grant funding to assist Caribbean Catastrophe Risk Insurance Facility members with premium payments for the 2020 Atlantic hurricane season.

“To support Caribbean governments whose social and economic sectors have been significantly disrupted by COVID-19, the European Union (EU) under its Global COVID-19 Response has provided a grant of €10 million (US$11 million) to CCRIF for premium support or for increasing coverage for its Caribbean members,” a release from CCRIF stated.

“This financial assistance to CCRIF is channelled through the EU Regional Resilience Building Facility managed by the Global Facility for Disaster Reduction and Recovery (GFDRR) and The World Bank. The GFDRR, the World Bank and CCRIF will continue efforts to secure further potential discounts to CCRIF member countries,” the release continued.

CCRIF noted that it received US$1 billion in insurance payments from its Caribbean members, which represents an eight per cent increase in insurance coverage for tropical cyclones, excess rainfall, earthquake, and fisheries. The company further underscored that the renewal of the “insurance policies at this time signals the strategic importance they are placing on disaster risk financing as key to advancing their sustainable development prospects.

A man walks through the rubble in the aftermath of Hurricane Dorian in the Great Abaco island town of Marsh Harbour on September 2, 2019. (Photo: PBS)

Member countries may choose to utilise the EU-funded discount during either the 2020/21 or 2021/22 policy years based on projections of low or negative growth.

Partners helping partners

While welcoming the support of the EU, especially “in the context of shrinking fiscal space”, CCRIF also noted that the grant to each member country would either discount their total gross premium or increase their policy coverage.

“EU is strongly committed to stand together with its partners in the Caribbean, providing emergency support and participating in the social/economic recovery process.The €10 million support has been provided to CCRIF SPC to ease payment of member countries’ premiums and improve their risk coverage against natural hazards.

— EU Ambassador to Barbados, the Eastern Caribbean States, OECS and CARICOM/CARIFORUM Daniela Tramacere

The EU’s contribution will also combine with CCRIF’s five per cent discount on gross premium for Tropical Cyclone coverage and another 15 per cent on additional coverage purchased by members for increased Tropical Cyclone and/or Earthquake coverage for the 2020/21 policy year.

Commenting on the purpose of the grant, EU Ambassador to Barbados, the Eastern Caribbean States, OECS and CARICOM/CARIFORUM Daniela Tramacere said, “Mitigation of COVID-19 impacts ahead of the hurricane season that already started in the region requires extraordinary and coordinated measures.”

EU Ambassador to Barbados, the Eastern Caribbean States, OECS and CARICOM/CARIFORUM Daniela Tramacere (Photo: Caribbean Export Development Agency)

The diplomat also reaffirmed the strong partnership between the EU the Caribbean at this time.

“EU is strongly committed to stand together with its partners in the Caribbean, providing emergency support and participating in the social/economic recovery process. The €10 million support has been provided to CCRIF SPC to ease payment of member countries’ premiums and improve their risk coverage against natural hazards, she said.