Grenada’s Prime Minister Dickon Mitchell says the government is exploring the possibility of having the island’s lone electricity company, GRENLEC, receive insurance coverage for natural hazards under the Caribbean Catastrophe Risk Insurance Facility (CCRIF).
Grenada is among regional countries that have renewed their parametric insurance coverage for tropical cyclones, excess rainfall and earthquakes, and the fisheries sector for the policy year 2022/23, which began on June 1, 2022.
A CCRIF statement said the coverage is for hazards relating to earthquakes, tropical cyclones, and excess rainfall policies. Governments participating in the insurance ceded over US$1.2 billion in coverage – an increase of ten percent over the previous year.
“Thirteen member governments increased their coverage compared with the 2021/22 policy year. The renewal and demand for increased coverage by members illustrate that countries continue to recognize the critical importance of financially protecting their economies against natural disasters, especially in the context of the increasing frequency and intensity of natural hazards,” said the release.
Prime Minister Mitchell, speaking during the weekly post Cabinet news conference, said Grenada is expecting a visit from CCRIF Chief Executive Officer, Isaac Anthony, in the coming weeks for further discussions on the catastrophic risk insurance.
Mitchell told reporters that specifically, discussions will focus on having the island’s lone electricity company being allowed to receive coverage under the government’s premium. Grenada’s premium after grants is US$1.5 million.
“We are looking to explore GRENLEC taking up insurance in relation to that, the public may or may not be aware that currently, GRENLEC is self-insured because private insurers traditionally have not been prepared to cover the transmission and distribution aspect of GRENLEC’s operation which are the poles and lines which are obviously absolutely essential for ensuring that electricity is delivered to the customers,” he said.
“As a result, since 1994 GRENLEC has had to put aside EC$2 million each year to fund what is called the hurricane fund and that is the fund that GRENELEC used after Hurricane Ivan in 2004 to be able to rebuild the transmission and distribution system.
“GRENLEC has not been part of the catastrophic risk insurance, now that insurance is available and subsequently is available for transmission and distribution lines, we obviously want to explore that possibility. Our colleague company in St Lucia is part of that and that is something we looking to explore as well,” said the prime minister.
CCRIF has offered parametric insurance products that provide coverage for hurricanes (tropical cyclones) and earthquakes since 2007 and began offering coverage for excess rainfall in June 2013. It is generally not open to private entities but as of December 2020, the government of Grenada became the major shareholder of GRENLEC.
CMC/
