CCRIF: Fast payouts critical to Caribbean disaster recovery

WESTERN BUREAU:

The Caribbean Catastrophe Risk Insurance Facility (CCRIF) has noted that regional governments are increasingly utilising parametric insurance to secure rapid access to cash following natural disasters, which is in keeping with what the scheme was designed for.

According to Elizabeth Emmanuel, head of technical assistance and corporate communications at the CCRIF, the model was designed to provide governments with quick liquidity following hurricanes, excessive rainfall, and other disasters, allowing them to begin recovery efforts without waiting for detailed assessments of physical damage.

Speaking during a plenary session on ‘Building Our Resilience: Climate-Smart Agriculture and Fisheries’ at the 20th Caribbean Week of Agriculture in Trelawny, she said the CCRIF has paid out US$483 million since its inception in 2007.

She said the facility recently paid Jamaica US$91.9 million following Hurricane Melissa, with the funds reaching the Government within 14 days.

“Parametric insurance is not a silver bullet. In many cases, it’s designed to buy time, reduce the volatility in the budget, and to begin recovery efforts quickly,” Emmanuel told delegates.

She also pointed to the rehabilitation and reopening of stalls operated largely by women at ‘Border’, located on the Westmoreland and St Elizabeth border, as one example of how CCRIF funds were used following Melissa.

Emmanuel explained how parametric insurance works.

“It is based on the intensity of an event, and the loss is calculated in a pre-agreed model caused by that event, which is what causes the payouts to be made quickly,” she said.

Emmanuel said the CCRIF had expanded from two products – tropical cyclone and excess rainfall – when it opened its doors to eight products, with additional offerings being developed.

The facility now has 40 members across the Caribbean and Central America, including governments, electric utilities, and water utilities.

She said the CCRIF was also expanding protection for the fisheries sector through its COAST (Caribbean Ocean and Aquaculture Sustainability Facility) for fisheries product, which Jamaica purchased this year and which is currently held by eight members.

The product was recently enhanced to include wave action following a request from Barbados, recognising that storm surge and waves can cause significant damage even when a tropical cyclone does not trigger a payout, Emmanuel said.

She noted that the CCRIF’s models are developed and owned within the Caribbean and Central America and are continually strengthened as new storms emerge and more data become available.

albert.ferguson@gleanerjm.com