The Government of Guatemala has benefited from its parametric disaster insurance coverage under the CCRIF SPC (formerly known as the Caribbean Catastrophic Risk Insurance Facility) as the countries parametric excess rainfall insurance was triggered by tropical storms Amanda and Cristobal.
Once again demonstrating the speed at which payouts can be made through the use of parametric triggers, Guatemala has already received a payout of roughly US $3.6 million after its excess rainfall (XSR) parametric insurance policy was activated.
The rainfall from the two tropical storms Amanda and Cristobal began on May 31st and fell for around nine days, causing widespread flooding and landslides across central America and parts of Mexico.
The storm was originally a Pacific tropical storm named Amanda, which made landfall and crossed the region only to emerge over the Bay of Campeche and intensify back into an Atlantic side tropical storm named Cristobal.
The resulting rainfall was extreme, with significant downpours hitting the region and Guatemala was among the most affected countries.
Guatemala only took out its CCRIF parametric disaster insurance for the first time in 2019 and is receiving a payout within its first year of joining the Facility.
This excess rainfall payout has been made under Guatemala’s policy for 2019/20. It has renewed its excess rainfall coverage for the new season, which began June 1st.
Since its inception in 2007, CCRIF has made a total of 43 payouts for 21 events (earthquakes, tropical cyclones, and excess rainfall events) to 14 member governments totalling US $155.8 million.
It is only through the pooling of risks, efficiencies gained in the reinsurance market and the use of parametric triggers that the CCRIF has become a key provider of disaster insurance for the Caribbean and Central American regions.
As we explained recently, CCRIF has extended discounts on premiums and other coverage benefits to certain of its members with the support of the World Bank, to assist them in continuing with their parametric disaster insurance protection, even despite the fiscal hits from Covid-19.
Guatemala was among the countries to take advantage of this and CCRIF said it opted to take out more coverage, rather than use the discount to reduce its premium spend.