CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility) made a pay-out of US$261,073 to the government of Belize as a result of heavy rains from Hurricane Earl on Aug. 4-5.
Rainfall from the hurricane caused widespread flood damage to homes and businesses, interrupted water and electricity services and brought losses to the tourism and agriculture industries, according to a report from the National Emergency Management Organization.
Cayman Islands-based CCRIF said its “prompt payment to the government demonstrated its commitment to provide policy pay-outs within two weeks after a qualifying hazard event.”
CCRIF SPC, a segregated portfolio company, aims to limit the financial impact of catastrophic hurricanes, earthquakes and excess rainfall events to Caribbean and Central American governments via parametric insurance policies sold at the “lowest possible” prices.
CCRIF’s parametric insurance policies are insurance contracts that make payments based on the intensity of an event (for example, amount of rainfall) and the amount of loss from an event calculated in a pre-agreed model.
“Therefore payouts can 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,” said CCRIF.
For example, Belize’s excess rainfall policy was triggered when the modeled “rainfall index loss” determined from the level of Hurricane Earl’s rainfall was greater than the attachment point on the country’s excess rainfall policy, CCRIF explained in a statement.
As part of its disaster risk management program, Belize also has a CCRIF tropical cyclone (TC) – or hurricane – policy, which is based on modeled losses due to wind and storm surge. As these losses were below the policy attachment point, the country’s TC policy was not triggered, CCRIF continued.
CCRIF CEO Isaac Anthony stated: “The CCRIF board and team are relieved that there was no loss of life – and we hope that the funds received from CCRIF will be useful to the government of Belize in their recovery efforts.”
For the policy year 2016/17, CCRIF sold 15 tropical cyclone policies, 11 excess rainfall policies and 13 earthquake policies to its 17 members in the Caribbean and Central America. CCRIF has been providing tropical cyclone and earthquake coverage since 2007 and first introduced its excess rainfall policy in 2013. In 2017, CCRIF expects to bring to market a new policy for drought.
Since its inception, the facility has made 15 pay-outs of approximately US$38.8 million to 10 member governments. All pay-outs were transferred to the respective governments within two weeks after each event.
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