reprioritization. 30. The second insurance layer with CCRIF coverage is calibrated based on loss functions’ damages for tropical cyclones and earthquakes as reported by CCRIF . In each country’s simulation the attachment point and maximum coverage are set according to the estimated damages along the expected loss function for 20 and 100 year estimated damages, respectively. Maximum coverage under CCRIF is thus the difference between maximum coverage and attachment point. CCRIF payouts in each simulation are triggered according with the ND algorithm explained above. The
for 20 and 100 year estimated damages, respectively. Maximum coverage under CCRIF is thus the difference between maximum coverage and attachment point. CCRIF payouts are triggered according with the ND algorithm explained above. The payout amount is determined as a proportion of simulated losses. In addition, in light of imperfect correlation between parametric triggers under CCRIF and actual damages, it is assumed that CCRIF payouts are discounted by a factor of 0.5 for 1/20 year losses based on insurance multipliers of near 1 for low coverage (that is, payouts
Attachment Point (years) 10 50 5 Exhaustion Point (years) 100 175 25 Ceding Percentage 25% 33% 5% Gross Premium (US$) $885,263 $100,000 $531,690 27. CCRIF payouts have been critical to finance post-disaster need and rehabilitation cost, especially considering its fast disbursement, just two weeks after a disaster . Over US$23 million in payouts have been received thus far, the majority following hurricane Maria (text table). However significant, the payouts have been vastly below the post-disaster need, and not always
models, and reducing administrative costs. Quick payouts following disasters, which helps members maintain essential government functions. In the case of CCRIF, payouts are made in14 days or less and the provision of flexible and rapid budget support is a key value proposition compared to conventional insurance schemes; Policy holders are the owners of the facility (CCRIF, PCRAFI, ARC), which allows benefits to accrue to member states either through dividend payments or lower premia. This also helps avoid conflicts of interest between increased profits and serving