Caribbean, Central America formalise partnership for catastrophe risk insurance
WASHINGTON, CMC – The Council of Ministers of Finance of Central America, Panama and the Dominican Republic (COSEFIN) and CCRIF SPC, formerly the Caribbean Catastrophe Risk Insurance Facility, on Saturday signed a memorandum of understanding that enables countries in the region to formally join the facility to access low cost, high quality sovereign catastrophe risk insurance.
During the ceremony at the World Bank, CCRIF SPC and the Government of Nicaragua also signed a Participation Agreement for it to become the first Central American country to formally join the facility.
Other member nations of COSEFIN are expected to join CCRIF SPC later this year and in 2016, the World Bank said.
Nine countries in Central America and the Caribbean experienced at least one disaster with an economic impact of more than 50 per cent of their annual gross domestic product (GDP) since 1980, the World Bank said.
The Washington-based financial institution said the impact of Haiti’s devastating earthquake, on January 12, 2010, was estimated at 120 percent of GDP.
The same year, tropical cyclone Agatha, in Guatemala, had devastating consequences, with poverty rates increased by 5.5 per cent, the World Bank said.
It said climate change also represents a significant development challenge, with average annual economic losses due to weather-related disasters amounting to one per cent or more of GDP in 10 Caribbean countries and four Central American nations.
Established in 2007, CCRIF is the world’s first multi-country catastrophe risk pooling mechanism, which offers sovereign insurance at affordable rates to its members against hurricanes, earthquakes and excess rainfall, according to the World Bank.
Currently, 16 Caribbean countries are members of CCRIF.