Caribbean Development Bank Media Release
ST. MICHAEL, Barbados (CDB) — Haiti, a Borrowing Member Country of the Caribbean Development Bank (CDB) is set to receive a payout of just over USD20 mn from CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility) on the country’s tropical cyclone policy, following the passage of hurricane Matthew. CDB has paid Haiti’s catastrophe risk insurance premium to CCRIF since 2010.
A release from CCRIF noted that Hurricane Matthew was of sufficient magnitude to trigger the full policy limit for Haiti’s tropical cyclone coverage. Tropical cyclone policies are designed to cover damage from wind and storm surge but not rainfall. The USD20 mn figure, based on preliminary calculations, will be the largest payment ever made by CCRIF.
Haiti also has an Excess Rainfall Policy, which may be triggered as well, and could entitle the country to another payout.
The compensation under the Tropical Cyclone Policy will be Haiti’s second payment from CCRIF, following the USD7.7 mn payout in 2010, following the devastating earthquake.
CCRIF Chairman, Mr. Milo Pearson, in making the announcement on Thursday September 6, thanked CDB for paying Haiti’s insurance premiums over the last few years, in support of that country’s overall disaster risk management strategy.
Meanwhile, Barbados will receive a payout of USD975,000 from CCRIF under its Tropical Cyclone Policy, and, along with some other countries in the Organisation of Eastern Caribbean States, may also be eligible for payment under the Excess Rainfall Policy.
The model for excess rainfall events requires a few days longer to calculate results compared with the wind-based tropical cyclone model. CCRIF is expected to issue new information when that assessment is complete.
CCRIF’s parametric insurance products are insurance contracts that make payments based on the intensity of an event (for example, hurricane wind speed, earthquake intensity or volume of rainfall) and the amount of loss – calculated in a pre-agreed model – caused by these events.
Parametric insurance enables payouts to be made very quickly after a hazard event. This is different from traditional insurance settlements that require an on-the-ground assessment of individual losses after an event before a payment can be made.
Since its inception in 2007, CCRIF has made a total of 15 payouts to 10 member governments totalling USD38.8 mn, all within 14 days of the event. This payment to Haiti will represent the 16th payout, which would make total payouts approximately USD58.8 mn.
On October 12, 2016, CCRIF SPC announced that it was also preparing to make additional payouts totalling almost USD8 mn to CCRIF member countries–Haiti, Barbados, Saint 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.
CCRIF confirmed that the payouts for all countries, due to Hurricane Matthew, would be made by October 19, 2016.