Storm insurance for Caribbean islands
Repeated severe damage by hurricanes has resulted in new insurance coverage for eight countries.
GRAND CAYMAN, Cayman Islands – The Caribbean Catastrophe Risk Insurance Facility (CCRIF) says it is now providing excess rainfall insurance coverage to eight regional countries as the Caribbean continues to take precautions against possible damage caused by storms and hurricanes during the 2014 Atlantic hurricane season.
The eight countries are Anguilla, Haiti, Barbados, Dominica, Grenada, St. Kitts & Nevis, St. Vincent & the Grenadines and Saint Lucia.
CCRIF is a not-for-profit risk-pooling facility, owned and operated by Caribbean governments. It is designed to limit the financial impact of catastrophic hurricanes and earthquakes to Caribbean governments by quickly providing short-term liquidity when a parametric insurance policy is triggered.
“The new excess rainfall product has been eagerly awaited by Caribbean governments as we all realize that considerable damage in the region is caused by rainfall and flooding. This product complements CCRIF’s hurricane coverage which determines losses based on wind and storm surge. We commend our eight members for taking the initiative and purchasing this ground-breaking product and hope that other countries in the region will follow,” said CCRIF chief executive officer Isaac Anthony.
Developed by CCRIF and global reinsurer Swiss Re, the excess rainfall product is aimed primarily at extreme high rainfall events of short duration whether they occur during a tropical cyclone or not.”Because the excess rainfall product is parametric, a payout can be made quickly – within 14 days – after a rain event that triggers a country’s policy, without waiting for time-consuming damage and loss assessments on the ground,” the CCRIF said in a statement.
Chairman, Global Partnerships, Martyn Parker, speaking on behalf of Swiss Re, said securing excess rainfall insurance protection demonstrates that Caribbean countries are taking a proactive approach to manage the contingent risks posed by climate change.
CCRIF said that the regional countries that have acquired the new policy will now be able to respond better to an event such as the trough that brought heavy rains to the Eastern Caribbean in December last year, resulting in the loss of life, extensive damage to infrastructure and wide-spread economic disruption.
Almost every hurricane season, Caribbean countries suffer millions of dollars in losses as a result of the destruction caused by the storms.