21 April 2014: Finance ministers from Central American and Caribbean countries gathered during the World Bank Group and International Monetary Fund (IMF) Spring Meetings to discuss how the Caribbean Catastrophe Risk Insurance Facility (CCRIF) might be expanded to include Central American countries. Honduras and Nicaragua were the first Central American countries to announce they will become CCRIF members.

Expanding CCRIF to a larger pool of countries is expected to lower operating costs and country premiums, generating savings of up to 25% for the current Caribbean members and 36% for Central American countries. The mechanism already saves countries 50% on average, as compared to the cost of buying insurance as an individual government on the international market. Costa Rica, El Salvador, Guatemala and Panama are among the other Central American countries that have expressed interest in joining CCRIF.

CCRIF has been recognized by donor countries as an effective and innovative climate change adaptation tool. In addition to US$15 million provided by Canada, the US Treasury and Mexico announced during the meeting that they will be providing US$10 million each to support the Facility. Hasan Tuluy, World Bank Vice President for Latin America and the Caribbean, announced that a pledging conference for donor countries will be held during the World Bank’s annual meetings in October.

CCRIF is a not-for-profit partnership among Caribbean Governments that provides parametric insurance in the event of catastrophic seismic activity, tropical storms or excess rainfall. Payouts since CCRIF’s creation seven years ago have totaled US$32 million. [World Bank Press Release] [CCRIF Website]