Grand Cayman, Cayman Islands, October 12, 2016 – CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility) is now preparing to make additional pay-outs totalling almost US$8 million to CCRIF member countries.
These pay-outs will be made to Haiti, Barbados, St. Lucia and St. Vincent & the Grenadines as a result of the heavy rains from Hurricane Matthew, which triggered payments on these countries’ Excess Rainfall policies.
Last week, CCRIF announced that the Government of Haiti is due a pay-out of approximately US$20.4 million on its Tropical Cyclone (TC) policy as a result of Hurricane Matthew. The pay-outs to Haiti from CCRIF will now total US$23.4 million. Similarly, Matthew triggered Barbados’ TC policy, resulting in a pay-out of a little under US$1 million under that policy for a total payment to Barbados of US$1.7 million as a result of Matthew.
The pay-outs for all countries due to Hurricane Matthew, which will be made by October 19, are presented in the table below.
Since CCRIF’s inception in 2007, the facility would have made a total of 21 pay-outs to 10 member governments totalling almost US$68 million, all within 14 days of the event.
As the Government and people of Haiti – and the international community – attempt to address the devastating impacts of Hurricane Matthew and the severe hardships being encountered by the people of Haiti, CCRIF is gratified that it can provide some immediate financial relief for urgent needs. We congratulate the Government on its foresight to obtain catastrophe insurance and express thanks to the Caribbean Development Bank for paying the country’s premiums over the last four years. Again, we offer our condolences for the loss of life and regret the extreme damage to Haiti’s communities.
After the announcement of the first pay-out, Minister of Finance, Yves Bastien, informed CCRIF that “the Government of Haiti – on behalf of the people of Haiti – appreciates the promptness with which CCRIF responded by triggering a payment of a little more than US$20 million. This pay-out is of utmost importance in our effort to bring some relief in different parts of the nation. Your organization may be certain we will be on your side for very long.”
In a CARICOM press release dated October 10, 2016, CARICOM Secretary General, Ambassador Irwin LaRocque, is quoted as saying: “The early response to the aftermath of Matthew, as well as the supportive facility put in place to help resource the required recovery and rebuilding effort, also underline the critical importance of the regional institutional frameworks established by the Community, CDEMA and the Caribbean Catastrophe Risk Insurance Facility (CCRIF), which has already processed payment to two of the affected countries, Barbados and Haiti.”
CCRIF is able to make quick pay-outs because it offers parametric insurance products. CCRIF’s TC policies make payments based on hurricane wind speed and storm surge levels and the amount of loss calculated in a pre-agreed model caused by the hurricane. They do not include losses due to rainfall. To fill this gap, CCRIF’s Excess Rainfall (XSR) product was developed in 2013. Excess Rainfall policies make payments based on the volume of rainfall from a hurricane or other rain event. A country’s TC or XSR policy is automatically triggered when the modelled losses surpass the policy’s “attachment point” or deductible, which was selected by the government.
Most CCRIF members have purchased both Tropical Cyclone and Excess Rainfall policies to provide coverage against these perils which sometimes occur during one hazard event such as Hurricane Matthew. Many members also have earthquake coverage. Member countries proactively incorporate CCRIF catastrophe insurance – as an example of effective risk transfer – into their national disaster risk management strategies as they seek to make their communities and economies more resilient to natural hazards and climate change.