Hurricane Paloma battered the Cayman islands of Brac and Litte Cayman during it’s rampage across the Caribbean over the weekend. The Cayman Islands are covered by the Caribbean Catastrophe Risk Insurance Facility but it’s not at all clear weather they will receive a payout from it.
Cayman Brac received a direct hit from Paloma while the storm was still packing winds of up to 140mph at category 4. Damage was sustained by up to 90% of dwellings.
The problem is; the Cayman Islands didn’t sign up for the lower trigger point on the CCRIF policies and the deductible is so high that it’s possible that they may not recieve anything.
It will become clear in the coming days whether they will get any respite but confusion within the market such as this does not exactly instill confidence in what is supposed to be a shining example of public-private risk transfer partnership. It begs the question of whether there could be a better solution for islands such as the Caymans or whether they could do more to protect themselves by combining this cover with other weather risk management techniques?
See our previous coverage of the Caribbean Catastrophe Risk Insurance Facility.