The Caribbean Catastrophe Risk Insurance Facility (CCRIF) has paid the Government of Haiti US $7,753,579 following the Magnitude 7.0 earthquake which struck close to Port-au-Prince on January 12, causing damage of catastrophic proportions.
The payment is the “full amount due to the country based on its catastrophe insurance policy for earthquakes for the 2009/10 policy year, and which forms part of the country’s disaster risk management strategy,” said the announcement. “This value represents approximately 20 times the premium of US$385,500.”
The CCRIF noted that it had made the decision to pay out the full amount in less than 24 hours after the quake struck. Under the terms of the insurance agreement, however, a 14 day waiting period was required.
The payout determination was made based on the strength and location of the earthquake as outlined in Haiti’s policy. CCRIF explained, that, because it is designed as a “parametric insurance facility,” payouts can be “calculated and made very quickly because loss adjusters do not have to be relied on to estimate damage after the event, which can take months or even years.”
Although the amount paid under the policy is small in comparison to the size of the damages, Dr. Simon Young, CEO of Caribbean Risk Managers, CCRIF’s Facility Supervisor, pointed out that they “have been paid directly to the Government and can be used in a way that the Haitian Government deems to be of prime importance at this time.”
He also indicated that “CCRIF will play an active role in the rebuilding of Haiti by assisting in hazard modeling and developing better hazard maps, and will be working with authorities in Haiti to better plan for natural hazards as the people of Haiti are re-settled and the rebuilding process gets underway.”
The CCRIF is also active in trying to prevent and mitigate the damages caused by natural disasters in the region. It said it will “continue to help countries to become more proactive in their disaster risk management strategies.” Following the disaster caused by the Haitian earthquake, the organization said it would “spend time meeting with other members to revisit their own earthquake coverage, as most Caribbean governments have placed greater emphasis on the hurricane component of their disaster portfolio.”
As an example the CCRIF explained that “Haiti’s earthquake coverage was only 15 percent of its total policy. CCRIF has the capacity to provide substantially more coverage for both earthquake and hurricane events, and does so at a rate of premium that is minimized through pooling and the not-for-profit nature of CCRIF’s operations.
“CCRIF also will work with its members to support the establishment of Country Risk Officers (CROs) as a fundamental part of the hazard risk management frameworks. These CROs will be responsible for managing their country’s risk portfolio and enabling the adoption of a holistic approach to risk management before catastrophic events occur, thereby reducing the country’s risk burden and its vulnerability.”
Source: Caribbean Catastrophe Risk Insurance Facility – www.ccrif.org
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