CCRIF Details Payments to Members for Tropical Cyclone Tomas

The Caribbean Catastrophe Risk Insurance Facility (CCRIF) announced that it has completed insurance payments to the Governments of Barbados, Saint Lucia and St. Vincent & the Grenadines following the passage of Tropical Cyclone Tomas which passed close to these islands on October 30-31.

CCRIF said it had released to each country 50 percent of their payouts on November 7, seven days after the storm’s passage, but “well before the end of the customary 14-day waiting period to facilitate requests from the three countries.

Prime Minister of St. Vincent & the Grenadines, Hon Ralph Gonsalves, stated that the early payment would facilitate “urgent restoration of services and clearing of the affected areas.”

The total payouts for the three countries were as follows:
— Barbados – US$8,560,247;
— Saint Lucia – US$3,241,613 and
— St Vincent & the Grenadines – US$1,090,388.

These three countries – along with 13 other Caribbean nations – have had catastrophe insurance for hurricanes and earthquakes with CCRIF since the inception of the Facility in 2007. CCRIF was formed at CARICOM’s request for a cost-effective risk transfer program for member governments, and the insurance policies now form part of these countries’ disaster risk management frameworks.

The bulletin also explained that the CCRIF “offers parametric insurance and therefore payouts can be calculated and made very quickly because there is no need to estimate damage after an event. Payouts for tropical cyclones are determined based on government losses calculated using storm data from the National Hurricane Center and parameters fixed within the loss estimation model used to underpin CCRIF’s policies.

“The model calculates the level of wind and ocean hazards, such as storm surge, encountered across the affected area and uses the pre-fixed value and distribution of government exposures to those hazards to calculate a loss. The specific payout totals are based on the level of coverage a country has.

“Each individual country chooses its own coverage options in terms of the attachment point (deductible), exhaustion point (coverage limit), and premium. The amount of the premium then dictates how much of the risk between the attachment and exhaustion points they are actually covered for.

“Hurricane Tomas resulted in significant damage to the three islands, with Saint Lucian officials reporting that Tomas was ‘the worst in Saint Lucian history, destroying the island’s entire banana crop. Across the three islands, roads and houses were damaged, power lines downed and the agriculture sector heavily impacted.”

Source: Caribbean Catastrophe Risk Insurance Facility