The Caribbean island nation of Haiti is to receive grant funding to help pay its premiums for parametric insurance cover from the CCRIF SPC (formerly known as the Caribbean Catastrophe Risk Insurance Facility).
The Caribbean Development Bank (CDB) has approved a grant of $3 million to support Haiti’s 2018-2019 insurance premiums for its parametric catastrophe cover with the CCRIF SPC.
The funding will assist Haiti in maintaining its parametric insurance protection against the perils of tropical cyclone, earthquake and excess rainfall, while the Government of Haiti will also contribute up to $1.8 million.
Director of Projects at the CDB Daniel Best explained that of the Bank’s 19 Borrowing Member Countries, Haiti is one of the most exposed to natural perils, making its coverage through the CCRIF a vital source of post-disaster financing.
“A large percentage of the population of Haiti is exposed to multiple hazards, due to climate change, the rapid growth of unplanned settlements, and ecosystem degradation and decline. We are pleased that the Government of Haiti is collaborating with development partners like CDB to design and implement development projects that focus on reducing the country’s risk to natural hazards, and help it adapt to climate change,” he explained.
The CCRIF parametric insurance products are designed to payout quickly and the facilities liquidity is underpinned by the strength of the global reinsurance markets, meaning capital can flow swiftly to where it is most needed and payouts are typically within two weeks of the loss event occurring.
“This type of insurance can play a unique role in tackling humanitarian emergencies by providing quick liquidity at a time when there is a dramatic reduction in Government revenue and, at the same time, a need for large government services expenditures,” Best said.
Haiti has so far received four payouts from the CCRIF. $7.7 million after the 2010 earthquake, $20.39 million under a tropical cyclone policy and $3.02 million under an excess rainfall policy following Hurricane Matthew in October 2016, and $162,000 in 2017 for Hurricane Irma.
That last payment was made under a newer addition to the CCRIF coverage structure, the Aggregated Deductible Cover, which provides a minimum payment for events that failed to breach the trigger of a CCRIF policy.
The CDB has committed to continuing to help finance Haiti’s CCRIF premiums, which will help to ensure that the country benefits from the parametric insurance protection and backing of the global reinsurance market for some time to come.