No insurance payouts for countries hit by Irene
GRAND CAYMAN, Cayman Islands, Wednesday August 31, 2011 – The Caribbean Catastrophe Risk Insurance Facility (CCRIF) says there will be no payouts to any of the islands that Hurricane Irene affected as it passed through the Caribbean last week.
That’s because, according to the CCRIF, while there was loss in six of its member countries – Anguilla, Antigua and Barbuda, the Bahamas, Haiti, St. Kitts and Nevis and the Turks and Caicos Islands – the damage was not enough to trigger the policies. Of the territories, the highest losses were determined for the Bahamas and the Turks and Caicos Islands.
According to Dr Simon Young, CEO of Caribbean Risk Managers, the Facility Supervisor of CCRIF, “based on reports from affected governments, we don’t see a major immediate loss of revenue to any of the countries impacted by Irene, which is what the CCRIF policy is designed to cover”.
“While the Bahamas endured the largest modelled loss, the absence of major impacts in Nassau and Freeport, where most of the economic exposure covered by the CCRIF policy is situated, meant that the loss was below the trigger level,” Dr. Young added.
“However, we do recognise that significant damage has been done in some of the smaller islands in the Bahamas, and CCRIF has already contacted the government to see what other ways it may be able to assist, for example through CCRIF’s technical assistance programme.”
Early damage reports indicate low to moderate impacts except for some southern and eastern islands in the Bahamas, which lay directly on Irene’s path. Critical tourism infrastructure, on which these countries largely depend for economic activity, was not badly affected.
The CCRIF said that the Bahamas Ministry of Tourism had indicated that the major tourism areas of Nassau/Paradise Island and Grand Bahama have seen a quick return to normal operations.
It said the Turks and Caicos’ Financial Secretary also confirmed that the damage was not as significant as was expected and indicated that the damage was primarily associated with flooding.
CCRIF’s current hurricane policy is specifically geared to wind and storm surge losses; impacts from rain and inland flooding are not included either in the premium calculation or the modelled loss.
The CCRIF is a not-for profit risk pooling facility, owned, operated and registered in the Caribbean for Caribbean governments.
It is designed to limit the financial impact of catastrophic hurricanes and earthquakes to Caribbean governments by quickly providing short term liquidity when a policy is triggered and is the world’s first and, to date, only regional fund utilising parametric insurance, giving Caribbean governments the unique opportunity to purchase earthquake and hurricane catastrophe coverage with lowest-possible pricing.
Since CCRIF’s inception in 2007, the Facility has made eight payouts totalling just under US$33 million to seven member governments. Most recently, following the passage of Hurricane Tomas in 2010, policies for three CCRIF member countries were triggered resulting in payouts to Barbados, St. Lucia and St. Vincent and the Grenadines.