Nicaragua has benefited from a $1.1 million parametric insurance policy payout from the CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility) after hurricane Otto triggered a payout to its tropical cyclone insurance coverage.
Hurricane Otto was the 16th named storm of the 2016 Atlantic Hurricane Season, forming as a very late season event over southwestern Caribbean Sea near the coast of Panama on November 21st 2016.
As a result of hurricane Otto’s interaction with Nicaragua there were reports of dozens of properties damaged, fallen trees, flooding, landslides and interruptions in potable water and electricity supplies. The Government of Nicaragua evacuated around 10,572 people prior to Hurricane Otto’s arrival.
The passage of hurricane Otto triggered a payment on Nicaragua’s Tropical Cyclone policy under the parametric CCRIF SPC facility. Impressively, the CCRIF SPC was able to make the $1.1 million payout December 9th, which was only 14 days after the passage of the hurricane.
This is Nicaragua’s second payout from a parametric insurance cover from the CCRIF SPC, following a payment of US$500,000 caused by a magnitude 6.1 earthquake that occurred on June 9th 2016.
Nicaragua was the first Central American country to join the CCRIF after it expanded to include this region and its Government signed a Participation Agreement in 2015 resulting in the purchase of both tropical cyclone and earthquake insurance coverage.
Since it launched in 2007, CCRIF has paid 10 of its member governments 22 times, with the payouts totalling $69 million, and all having been made within 14 days of the event occurring. In 2016, CCRIF has made nine payouts amounting to more than $31 million to six member countries’ when policies covering tropical cyclone, excess rainfall and/or earthquake policies were triggered. The four covered events were Hurricane Earl, the June 9 Nicaragua earthquake, Hurricane Matthew and Hurricane Otto.