By tomorrow four Caribbean countries will have received payouts from the CCRIF PC (formerly the Caribbean Catastrophe Risk Insurance Facility) due to Hurricane Matthew, for a total of $29.2 million.
The chart above shows a $20.4 million payout by the CCRIF to the Government of Haiti on its Tropical Cyclone (TC) policy as a result of Hurricane Matthew, and an additional payment of just over $3 million on its excess rainfall policy, for a total of $23.4 million.
The payments come just two weeks since Hurricane Matthew hit Haiti as a Category 4 storm, devastating the southern portion of the country and leaving more than 1,000 dead.
Barbados will also see a payout of just under $1 million on its TC policy for a total payment to the country of $1.7 million due to Matthew.
The excess rainfall policies of Saint Lucia and St. Vincent & the Grenadines were also triggered by Hurricane Matthew, resulting in CCRIF payments to those countries of $3.8 million and $285,349, respectively.
Including the Hurricane Matthew payments, CCRIF has now made a total of 21 payouts to 10 member governments totaling almost $68 million since 2007, all within 14 days of an event.
CCRIF is able to make quick payouts because it offers parametric insurance products to its member countries.
TC policies make payments based on hurricane wind speed and storm surge levels and do not include losses due to rainfall. To fill this gap, CCRIF’s Excess Rainfall (XSR) product was developed a few years ago. Under the excess rainfall policies, payments are triggered based on the volume of rainfall from a hurricane or other rain event.
Each government selects its own attachment point or deductible, so the individual country’s policies are triggered when the modeled losses surpass that point.
Most CCRIF members have purchased both TC and XSR policies and many members also have earthquake coverage.
Just last year, the CCRIF expanded its membership to countries in Central America as well as the Caribbean.
Artemis blog reports that the $29.2 million of payouts due to Hurricane Matthew by the CCRIF will not come close to troubling its catastrophe bond coverage, but could result in the facility being able to call on reinsurance support for some of the loss.
It also predicts increasing uptake of parametric insurance for disaster protection and recovery funding as more corporate buyers become aware of the opportunities.