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Hurricane Irma CCRIF Parametric Insurance Payments Total $31.2 Million

Hurricane Irma 480x377
September 22, 2017

Due to Hurricane Irma, CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company) has made payouts totaling $31.2 million to 6 countries for the 2017 Atlantic hurricane season. Since its inception in 2007, CCRIF SPC has made payouts of a little more than $100 million to 12 of its 17 member countries.

The organization reports that all of the $100 million payments have been made within 14 days of a catastrophic event, triggering CCRIF parametric insurance policies.

With 2 months to go in the 2017 Atlantic hurricane season, payouts from the impacts of Hurricane Irma have most recently been made under the excess rainfall (XSR) policies of Anguilla, Turks and Caicos Islands, and the Bahamas. Anguilla and the Turks and Caicos Islands also received payouts under a new feature for tropical cyclone (TC) policies known as the aggregate deductible cover (ADC).

All of the CCRIF Hurricane Irma payments are delineated and totaled below.

Country

Payments for Tropical Cyclone under Irma (US$)

Antigua and Barbuda (TC)

$6,794,875

Anguilla (TC and XSR)

$6,687,923

St. Kitts and Nevis (TC)

$2,294,603

Turks and Caicos Islands (TC and XSR)

$14,864,633

Haiti (ADC)

$162,000

The Bahamas (ADC and XSR)

$397,598

Total

$31,201,632

 

CCRIF CEO Isaac Anthony said, "The injection of short-term liquidity that CCRIF provides when a policy is triggered is not intended to cover all the losses on the ground following a disaster, but is designed to allow governments to reduce their budget volatility and to provide much needed capital for emergency relief such as clearing of debris and other clean-up activities, restoring critical infrastructure, and most importantly providing humanitarian assistance to the affected population, thereby reducing post-disaster resource deficits."

CCRIF is a segregated portfolio company that was established following Hurricane Ivan in 2004 and was designed to help countries add to their revenues in the short term by providing a quick infusion of cash to help them fund the initial phase of their disaster response and avoid interruption of their basic business of government. The importance of a rapid CCRIF payout when a parametric insurance policy is triggered is vital, given the time it often takes to receive pledged international financial assistance.

Each member pays an annual premium directly related to the amount of risk it transfers to CCRIF and can purchase coverage up to a limit of approximately $100 million for each insured hazard (tropical cyclones, earthquakes, and excess rainfall events). According to Mr. Anthony, "[B]y pooling the catastrophe risks of our members into a single diversified portfolio, we are able to save our members approximately 50 percent in individual premium payments compared to if they were to purchase identical coverage individually."

Notwithstanding CCRIF's vital role, as clearly evidenced through Hurricane Irma, the facility urges its members not to view the organization as a silver bullet for managing disaster risk but rather a complementary tool in addressing the much broader issues of disaster management and climate change adaptation within the state.

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