Speedy insurance payout of USD 29 million to support Caribbean relief in wake of Matthew
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The tally of lives lost, and number of people displaced in the wake of Matthew is tragic. Outbreaks of cholera due to water mixing with sewage in Haiti is further aggravating the extreme hardship, emphasizing the urgent need for swift financial relief.
CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility), reinsured by Swiss Re, is preparing a rapid payout to affected member states including Haiti, Barbados, St Lucia, St Vincent and the Grenadines of more than USD 29 million, scheduled for October 19th.
Since CCRIF's inception in 2007, the facility will have made a total of 21 emergency relief payouts to 10 member governments, totaling almost USD 68 m, all within 14 days of the event. Bridget Carle, Client Management Consultant, Global Partnerships Americas, explained that CCRIF is able to make payments directly to the Caribbean governments so quickly because they rely on parametric insurance models to determine payment, using modeled wind speed, storm surge and rainfall figures, rather than relying on a loss adjustment process. "After an event like Hurricane Matthew, the payment speed is critical so governments have an influx of funding to focus on providing emergency relief to those who need it most".
Swiss Re Corporate Solutions developed the excess rainfall product jointly with CCRIF. Jacob Choi, Senior Underwriter Agro, Corporate Solutions Americas, explained that most CCRIF members have purchased both Tropical Cyclone and Excess Rainfall policies to provide complementary coverage against these perils. "Importantly, they can be simultaneously triggered in one event, such as with Hurricane Matthew". Many CCRIF members also have earthquake coverage.
The Caribbean nations forming part of the CCRIF SPC proactively incorporate catastrophe insurance as an example of effective risk transfer into their national disaster risk management strategies, in order to make their communities and economies more resilient to natural hazards and climate change.