Haiti to get US$20m insurance payout
CCRIF SPC, formerly the Caribbean Catastrophe Risk Insurance Facility, plans to make its largest ever payout of more than US$20 million to the government of Haiti, arising from the destruction wrought by Hurricane Matthew.
The storm triggered a payment 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," said the Cayman Islands-based insurance facility in a release on Thursday.
CCRIF Chairman Milo Pearson announced the plans at the IMF/World Bank Group Annual Meetings under way in Washington DC. He also thanked the Caribbean Development Bank (CDB) for paying Haiti's insurance premiums over the last few years in support of that country's overall disaster risk management strategy, recognising the key role of risk transfer instruments.
Since its inception in 2007, CCRIF has made a total of 15 payouts to 10 member governments totalling US$38.8 million, all within 14 days of the respective events.
Haiti's payment for this one event equates to more than half of all payments over nine years and will grow distributions to just shy of US$59 million. It will be the French-speaking country's second payment from CCRIF.
In 2010, following the devastating earthquake that mobilised the world in a rescue effort, CCRIF made a payment to the government of Haiti of US$7.7 million, based on the terms of its earthquake policy.
That payment represented the first inflow of direct financial assistance received by Haiti at the time. The Haitian government used the CCRIF funds to cover salaries of key emergency personnel, thereby "keeping the wheels of government turning," said CCRIF on Thursday.
CCRIF's parametric insurance products are insurance contracts that make 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.
Parametric insurance enables payouts to be made very quickly after a hazard event. This is different from traditional insurance settlements that require an on-the-ground assessment of individual losses after an event before a payment can be made.
Hurricane Matthew made landfall in Haiti on October 4 as a powerful Category 4 hurricane.
A United Nations representative to Haiti, Mourad Wahba, reportedly said the country was now facing its largest humanitarian crisis since the earthquake in 2010. Twenty-three deaths have been reported so far.
According to the Haiti Renewal Alliance, Matthew brought intense rain, wind and surge waves, causing mudslides and flooding. The main bridge that links the capital of Port-au-Prince to southern Haiti has collapsed and the coast has been badly hit in the areas of Grande Anse, Port-Salut and Port-a-Piment, with 1.24 million people affected, including 522,000 children.
Initial estimates suggest that four million children in Haiti will be directly affected by the storm.