NASSAU, The Bahamas, Tuesday September 10, 2019 – The Bahamas will get almost US$11 million from the region’s catastrophe risk insurance fund following the passage of Hurricane Dorian that caused widespread devastation in the northern part of the 700-island archipelago.
CCRIF says the government will receive $10,936,103.
The Bahamas has three tropical cyclone policies with CCRIF, each one covering a section or zone of the archipelago – North West, South East and Central. It is the tropical cyclone policy for the North West Zone – which includes the Abaco Islands and Grand Bahama – that was triggered. Dorian made landfall in the north of the archipelago – the Abaco Islands on September 1 and battered Grand Bahama for two days.
CCRIF’s payouts are made within 14 days of an event, but in this case CCRIF made an advance payment today of 50 per cent of the payout to allow the Government to begin to address its most pressing needs – with the remaining 50 per cent to be paid within the 14-day window for all CCRIF payouts.
CCRIF CEO Isaac Anthony contacted the Government of The Bahamas to inform of the payout and to express the Facility’s own commiseration for the many lives lost and to pledge support to the Government as it seeks to recover and rebuild not just infrastructure but also lives.
In acknowledging the destruction and damage wrought on the northern islands of The Bahamas, he expressed some relief that Dorian spared most of the other islands.
This additional support that could be provided by CCRIF to the Government of The Bahamas will come from the Facility’s corporate social responsibility or technical assistance (TA) programme.
Over the years, CCRIF has provided resources from its TA Programme to governments to support specific projects after a natural disaster. In fact, The Bahamas was the recipient in 2012 of a TA grant of US$85,000 following the passage of Hurricane Sandy for the construction of a new sea wall at Sandyport Beach. Similar sized grants have been provided over the years, to Jamaica (US$100,000 for the rehabilitation of the Muirton Boys Home following Hurricane Sandy in 2012) and Dominica (US$100,000 for the construction of new fencing at the Douglas-Charles Airport, which was damaged by Tropical Storm Erika in 2016) among others. The CCRIF Board and Management will decide on possible TA support to The Bahamas in collaboration with the Government in the coming weeks.
“Member governments are appreciative of this rapid infusion of quick liquidity through CCRIF payouts from its parametric insurance policies, which they are able to use to address immediate priorities and to support the most vulnerable in their population,” Anthony said.
“CCRIF, through the parametric insurance products that it provides, is an example of a disaster risk financing tool that is most applicable for high impact low frequency events; and the instrument is designed to allow member governments to reduce their budget volatility and to provide some amount of financial resources for emergency relief such as restoring critical infrastructure and providing assistance to the affected population, thereby assisting to reduce post-disaster resource deficits.”
CCRIF said the rapid payouts are possible because the insurance policies that CCRIF sells are parametric as opposed to indemnity insurance otherwise referred to as traditional insurance. Parametric insurance products are insurance contracts that make payments based on the intensity of an event (for example, hurricane wind speed, earthquake intensity, volume of rainfall) and the amount of loss calculated in a pre-agreed model caused by these events. Therefore, payouts can be made very quickly after a hazard event, making CCRIF’s parametric insurance different from traditional/indemnity insurance that require an on-the-ground assessment of individual losses after an event before a payment can be made – which can take months for a claim to be settled.