Thursday 28th February, 2008


Caribbean insurance facility appoints new reserves manager

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MIAMI—Wealth manager London & Capital, which manages assets on behalf of a growing client-base of offshore captive insurance companies, focusing on capital preservation and absolute returns, has been appointed to manage the reserves of the Caribbean Catastrophe Risk Insurance Facility (CCRIF).

The Caribbean-owned, regional institution is the world’s first regional disaster insurance facility.

London & Capital, which manages assets in excess of £$3.4 billion (as at September 30, 2007), will manage an initial mandate of £$35 million for the CCRIF, rising to more than £$100 million over the next three years.

The CCRIF was established at the request of Caricom heads of government, using funds pledged by the international donor community and will provide the facility’s 16-member governments with immediate liquidity if hit by a catastrophic earthquake or hurricane.

Caribbean nations are highly vulnerable to natural disasters and have limited options available to respond.

On average, one major hurricane affects a Caricom country every two years.

Losses resulting from Hurricane Ivan in Grenada amounted to 200 per cent of Grenada’s GDP and were also significant in Jamaica and the Cayman Islands.

Small states often depend on extensive financing from international donors to finance post-disaster needs.

The CCRIF, which is based on a parametric insurance model, allows participating countries to pool their risk and should result in premium reductions of as much as 40 per cent.

Supervised by CaribRM, a risk management company specialising in catastrophe modelling, the CCRIF has developed and established the criteria on which damages will be paid giving it the ability to settle claims expeditiously. This means that unlike traditional insurance, loss adjusters do not need to tally damage after catastrophe occurs, which can take months or even years.

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