GRAND CAYMAN, Cayman Islands, Friday October 7, 2016 – The government of Haiti is still to determine the extent of the damage caused by Hurricane Matthew, but it’s about to receive a record insurance payout.
The CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility) says it’s preparing to make a payment to the government on the country’s Tropical Cyclone Policy. Based on preliminary calculations, Haiti will receive a little over US$20 million – the largest payment ever made by CCRIF.
Barbados, which also has a Tropical Cyclone Policy, will also get a payout – though nearly not as much as Haiti – as a result of Matthew passing over the island as a tropical storm on September 28.
Here’s why. CCRIF’s parametric insurance makes payments based on the intensity of an event – for example, hurricane wind speed, earthquake intensity or volume of rainfall – and the amount of loss calculated in a pre-agreed model caused by these events.
Hurricane Matthew made landfall in Haiti on October 4 as a powerful Category 4 Hurricane and caused what United Nations representative to Haiti, Mourad Wahba, said was the country’s largest humanitarian crisis since the earthquake in 2010 left more than 200,000 dead and tens of thousands living in tents and makeshift dwellings.
In Barbados, there were reports of fallen trees, isolated flooding, power outages and water disruption in some parts of the island.
The impact of Matthew was vastly different, and the payouts reflect that. Barbados’ payment under the Tropical Cyclone Policy will be US$975,000.
Tropical Cyclone policies are designed to cover damages from wind and storm surge but not rainfall. So it’s also possible that Haiti’s and Barbados’ rainfall policies will be triggered, entitling them to an additional payout, the CCRIF said.
It added that other countries in the Eastern Caribbean that were earlier affected by Matthew could receive payouts under their Excess Rainfall Policies.
The model for excess rainfall events requires a few days longer to calculate results compared with the wind-based tropical cyclone model and CCRIF said it would issue new information when that assessment is complete.
CCRIF Chairman Milo Pearson, who made the payout announcement at the IMF/World Bank Group Annual Meetings yesterday, thanked the Caribbean Development Bank for paying Haiti’s insurance premiums over the last few years in support of that country’s overall disaster risk management strategy.
CCRIF CEO Isaac Anthony expressed condolences to the government and people in Haiti. He said he had spoken to government officials in Haiti yesterday and they were looking forward to getting the payout and beginning recovery efforts.
Since its inception in 2007, CCRIF has made a total of 15 payouts to 10 member governments. The latest payment to Haiti will take the total payouts to approximately US$58.8 million.
It will be Haiti’s second payment from CCRIF. Following the 2010 earthquake, insurance facility made a US$7.7 million payment to the government, based on the terms of the country’s Earthquake Policy.