Grand Cayman, Cayman Islands, November 25, 2014 – On November 20, 2014 CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility) made payouts to the Governments of Anguilla and St. Kitts & Nevis under their excess rainfall insurance policies. These payments were due as a result of rains from a low pressure trough located over the northern Lesser Antilles islands between November 7 and 8. St. Kitts’ Meteorological Services recorded 125 mm of rainfall over the 2-day period from 8:00 pm on November 6 to 8:00 pm on November 8 at the Robert L. Bradshaw International Airport in the south of St. Kitts. The Director of Disaster Management in Anguilla indicated that total rainfall during this period was 148.8 mm.
St. Kitts & Nevis received US$1,055,408 and Anguilla received US$559,249. This is the second payment made to the Government of Anguilla under its excess rainfall insurance policy this year. On October 27, the Government received US$493,465 from CCRIF as a result of heavy rains that caused flooding in the country during Hurricane Gonzalo.
The Excess Rainfall policies of these two countries were triggered because the Rainfall Index Losses produced by the Caribbean Rainfall Model that underlies the policies was above the policy attachment point (deductible). These modelled government losses were calculated based on the model’s measurement of maximum accumulated rainfall from remotely sensed data from satellites. The Caribbean Rainfall Model is operated by Kinetic Analysis Corporation.
The payout values reflect the application of policy conditions to the modelled government loss. Each CCRIF member selects its own policy attachment point, exhaustion point (equivalent to the full policy value) and the level of premium they wish to pay. These three conditions then dictate what the payout will be relative to the Rainfall Index Loss.
The development of the Excess Rainfall product was in direct response to interest expressed by many CCRIF participating countries and stakeholders in making available catastrophe rainfall coverage. This is becoming increasingly important to the Caribbean in the face of climate change impacts leading to greater weather variability.
While CCRIF member countries typically have Tropical Cyclone (hurricane) insurance policies which are based on wind and storm surge damage, eight of these countries – Anguilla, Barbados, Dominica, Grenada, Haiti, Saint Lucia, St. Kitts & Nevis and St. Vincent & the Grenadines – purchased Excess Rainfall policies for the 2014/2015 cycle.
Government officials in Anguilla and St. Kitts & Nevis indicated that CCRIF’s payment of funds so quickly after the event would enable them to make immediate repairs to government facilities and assets that suffered the most severe damage from the storm – those whose operation provides a key service to the citizens of those countries and whose condition is considered a real and present hazard to the public. The funds also will be used to implement medium- or longer-term mitigation measures that must be undertaken to make their countries more resistant to future flooding.
About CCRIF SPC: CCRIF SPC (CCRIF) is a segregated portfolio company, owned, operated and registered in the Caribbean. It limits the financial impact of catastrophic hurricanes, earthquakes and excess rainfall events to Caribbean governments by quickly providing short-term liquidity when a parametric insurance policy is triggered. It is the world’s first regional fund utilising parametric insurance, giving Caribbean governments the unique opportunity to purchase earthquake, hurricane and excess rainfall catastrophe coverage with lowest-possible pricing. CCRIF was developed under the technical leadership of the World Bank and with a grant from the Government of Japan. It was capitalised through contributions to a multi-donor Trust Fund by the Government of Canada, the European Union, the World Bank, the governments of the UK and France, the Caribbean Development Bank and the governments of Ireland and Bermuda, as well as through membership fees paid by participating governments. Since the inception of CCRIF in 2007, the facility has made eleven payouts totalling US$34,287,592 to eight member governments. All payouts were transferred to the respective governments within two weeks after each event.