Eight members of the Caribbean Catastrophe Risk Insurance Facility (CCRIF) have become the first countries to purchase its excess rainfall insurance coverage for the 2014/2015 policy year.
Developed by CCRIF and global reinsurer, Swiss Re, the excess rainfall product is aimed primarily at extreme high rainfall events of short duration (a few hours to a few days), whether they happen during a tropical cyclone (hurricane) or not.
Like CCRIF’s tropical cyclone and earthquake insurance, the excess rainfall product is parametric and estimates the impacts of heavy rain using satellite rainfall data from the Tropical Rainfall Measurement Mission (TRMM) and exposure from CCRIF’s risk estimation database. Because the excess rainfall product is parametric, a payout can be made quickly (within 14 days) after a rain event that triggers a country’s policy, without waiting for time-consuming damage and loss assessments on the ground.
As a result, these countries will now be able to respond better to an event such as the trough that brought heavy rains to the Eastern Caribbean in December last year, which resulted in loss of life, extensive damage to infrastructure and wide-spread economic disruption. The excess rainfall product is independent of the tropical cyclone product and if both policies are triggered by an event then both payouts are due.
CCRIF CEO, Isaac Anthony, states that: “The new excess rainfall product has been eagerly awaited by Caribbean governments as we all realize that considerable damage in the region is caused by rainfall and flooding. This product complements CCRIF’s hurricane coverage which determines losses based on wind and storm surge. We commend our eight members for taking the initiative and purchasing this ground-breaking product and hope that other countries in the region will follow.”
As the main part of the Atlantic Hurricane Season approaches, CCRIF says it remains committed to supporting its members in their disaster risk management initiatives and their progress towards climate resiliency.
In expressing Swiss Re’s support, Martyn Parker, chairman of global partnerships, stressed: “Securing excess rainfall insurance protection demonstrates that Caribbean countries are taking a proactive approach to manage the contingent risks posed by climate change. Swiss Re is proud to support them in their efforts to ensure fiscal stability after a disaster.”
Caribbean, government, CCRIF, excess rainfall, TRMM, hurricane, Isaac Anthony