CGM Gallagher retains management of regional catastrophe insurance
Published:Wednesday | September 15, 2010 | 12:00 AM
Caribbean Risk Managers Limited (CaribRM), a subsidiary of the CGM Gallagher insurance group, has retained for another three years, the management a disaster risk insurance fund set up for Caribbean countries with help from the World Bank.
"Caribbean Risk Managers did retain the job and we have a three-year contract," Dr Simon Young, the chief executive officer of CaribRM, told Wednesday Business.
"The contract now in place started August 1," he said.
The Caribbean Catastrophe Risk Insurance Fund (CCRIF) was developed through funding from the Japanese Government, and was capitalised through contributions to a multi-donor Trust Fund by the European Union, the World Bank, the governments of the UK among others, which has been added to by premium payments by 16 participating countries, including Jamaica. They are insured against certain hurricane and earthquake risks.
Caribbean governments may purchase coverage which triggers for a 'one-in-15-year' hurricane and a 'one-in-20-year' earthquake, with maximum coverage of US$100M available for each peril.
The fund now stands at US$100 million.
Payout losses from the fund are calculated through an index or model in which hazard levels such as wind, storm surge and waves for hurricane and ground shaking for earthquake are used as a proxy for losses.
The facility's supervisor is in charge of the daily operations of the catastrophe scheme, a job that covers risk management, financial planning, catastrophe modelling, interacting with participant governments, coordination of the reinsurance placement and supervision of public relations and outreach.
The facility supervisor is also required to conduct research designed to improve catastrophe risk management in the region, improve existing CCRIF products and developing and implementing new catastrophe- related products.
CaribRM's first three-year contract ended in April and the new contract was put to international tender.
"The contract award to CaribRM followed an international tender process which was based on World Bank guidelines which CCRIF incorporated into its procurement procedures," Young said.
While Young declined to give the value of the contract, Wednesday Business sources say that it would be worth between US$250,000 and US$500,000 annually.