The Government of The Bahamas has now received US $12.8 million in payouts from its parametric insurance policies with the CCRIF (formerly named the Caribbean Catastrophe Risk Insurance Facility).
As we’d already reported, the CCRIF made an initial payout of almost $11 million to the Bahamas after Category 5 hurricane Dorian devastated some of its islands and triggered its parametric tropical cyclone insurance policy.
That payout came within days, with the Bahamas Government receiving 50% of the $11 million total within a week of the disaster and the remainder coming within the typical 14 day CCRIF payout window.
Now the CCRIF has revealed that total payouts reached $12.8 million, with US $11,527,151 from the triggering of its parametric tropical cyclone insurance policy and US $1,297,002 from its parametric excess rainfall policy for the North West zone, which is where the Abaco Islands and Grand Bahama sits.
The Bahamas has 3 tropical cyclone policies and 3 excess rainfall policies with CCRIF, each of which covers a section or zone of the archipelago.
All payouts were made within the typical 14 day window, CCRIF said, with the first 50% preliminary estimated tropical cyclone payout having come much quicker as it was so apparent the triggers would be breached by powerful hurricane Dorian.
Deputy Prime Minster of The Bahamas Peter Turnquest is reported to have stated, “The Caribbean Catastrophe Risk Insurance Facility is worth it. The hurricane insurance is going to give us roughly $10.9 million [the initial payout estimate] which is more or less in line with what we expected.”
In the end the Bahamas has received $12.8 million of rapid post-disaster financing, thanks to the efficacy of parametric triggers and the efficiency of reinsurance market capital and technology.
So far, since its launch in 2007, the CCRIF has made 40 payouts totalling about US $152 million to 13 of its 21 member governments.
These payouts are important injections of cash after catastrophe strikes, funded by the depth of global reinsurance markets and thanks to the risk pooled nature of the CCRIF.
As CCRIF’s risk pool grows the efficiencies increase as well, offering the member nations access to more efficient reinsurance capital and much-needed liquidity for post-disaster recovery.