The Turks & Caicos Islands may be the next Caribbean country to take up the new excess rainfall parametric insurance product from the Caribbean Catastrophe Risk Insurance Facility (CCRIF) as it looks to become more financially resilient to flooding.
The CCRIF, with the help of global reinsurance firm Swiss Re, launched the excess rainfall cover recently and eight Caribbean countries all purchased the product for their 2014/15 renewal. The Turks & Caicos government already purchases a standard flood policy, providing it with a level of protection, but is understood to be looking into the parametric excess rainfall product to see if it would be better suited, or augment the protection it receives.
The Turks & Caicos Sun newspaper reports that Premier Hon. Dr. Rufus Ewing is exploring the possibility of securing excess rainfall insurance cover from the CCRIF. The Premier commented; “The Government currently has flood coverage in the current insurance policy. However, we will definitely be looking into the Excess Rainfall Product mentioned to gather more information about it and to see whether or not it would be of greater value to the Government than what we currently have.”
The parametric trigger structured excess rainfall insurance product is designed to protect policyholders from extreme high rainfall events of short duration (a few hours to a few days). The policy estimates the impacts of heavy rainfall using satellite rainfall data from the Tropical Rainfall Measurement Mission (TRMM), a research initiative undertaken by the US National Aeronautics and Space Agency (NASA) and the Japan Aerospace Exploration Agency (JAXA).
The Turks & Caicos already has tropical storm and hurricane cover through the CCRIF, which gives it protection based on wind speed and storm surge factors. Adding cover for extreme periods of rainfall, whether from tropical storms or not, would be a good addition to its financial resilience to severe rainfall events throughout the year and the flooding that can result from them.
The eight countries which have already purchased the excess rainfall product from CCRIF are Anguilla, Haiti, Barbados, Dominica, Grenada, St. Kitts & Nevis, St. Vincent & the Grenadines and Saint Lucia. We’d expect other countries to gradually take up the excess rainfall product to complement their tropical wind cover.