The Caribbean Catastrophe Risk Insurance Facility (CCRIF), a non-profit multi-country risk pooling initiative providing parametric hurricane or earthquake disaster cover to Caribbean countries, has scheduled its long-awaited parametric excess rainfall insurance product for the end of this year. Originally targeted for 2010, the product was eventually delayed due to the conclusion that the model used was not yet ready for use due to a lack of robust historical rainfall data.
In July the CCRIF said that the historical rainfall record produced by the model using NOAA data was not robust enough to underpin a parametric rainfall policy and so the project was delayed.
In their most recent update the CCRIF said that they are now looking to launch a slightly less sophisticated excess rainfall product by year-end. The update says that reinsurer Swiss Re has been selected to develop an extreme rainfall product and that they would be using NASA-processed satellite rainfall data to underpin the parametric rainfall insurance policies.
It will be a little less sophisticated and will work as a rainfall hedge rather than rather than replicating the actual loss experience from the hazards related to heavy rainfall.
The CCRIF are continuing their work on their regional rainfall model in parallel as they believe that this will bring the best solution for parametric rainfall coverage to the region in the long-term.