Having already received a $10.7 million payout under its parametric tropical cyclone policy after hurricane Eta from the CCRIF, Nicaragua has now also received a payout for a second Category 4 storm, hurricane Iota.
The CCRIF SPC (formerly known as the Caribbean Catastrophe Risk Insurance Facility) provides a range of parametric catastrophe insurance products to the Caribbean and Central America region, including for the peril of tropical cyclone.
The Government of Nicaragua has now received a US $19.9 million payout after recent major hurricane Iota also triggered its parametric tropical cyclone insurance policy with the CCRIF.
Taking the total payouts under the parametric insurance policy to US $30.6 million from the two Category 4 hurricanes that hit Nicaragua within a matter of weeks of each other.
CCRIF CEO, Mr. Isaac Anthony commented, “We would like to play our part in creating an environment for greater levels of South-South cooperation between the Caribbean and Central America as they confront similar natural hazards and have similar vulnerabilities. We are committed through our upcoming strategic planning sessions in 2021 to create strategies and activities beyond those focused on financial protection that would help to bring these two regions together to share best practices, lessons learned and experiences in disaster risk management and climate change adaptation that would help to advance the sustainability agendas of both regions”.
Including this latest payout, the CCRIF has now made CCRIF has made 48 payouts to 14 of its member governments, totalling approximately US $194 million and with all made within 14 days of the event.
That record is testament to the nature of parametric insurance and reinsurance coverage, which can provide rapid disbursements of much needed risk capital quickly after natural disasters or severe weather events occur.
Nicaragua itself has now have received four payouts from its parametric insurance coverage from the CCRIF, having received US $1.1 million after tropical cyclone Otto in November 2016 and another US $500,000 for an earthquake in June of that year.
Now, with payouts also received for each of these two hurricanes, Nicaragua again benefits from the efficiency of parametric risk transfer protection and the risk pooled nature of the way CCRIF accesses the reinsurance market.
By pooling regional natural catastrophe risks and leveraging the global reinsurance markets, CCRIF can pass on more efficient parametric insurance products to governments in the region.