The Caribbean Catastrophe Risk Insurance Facility (CCRIF) will make a payout of $10.7 million to the Government of Nicaragua following the passage of Tropical Cyclone Eta.
CCRIF has already paid an advance of $3.7 million to the Government of Nicaragua, with the remainder to be paid by November 19, following verification of the final model results.
Both the country’s tropical cyclone and excess rainfall parametric insurance policies were triggered by Eta, the 29th and most powerful tropical cyclone of the 2020 Atlantic Hurricane Season, which made landfall in Nicaragua as a category four hurricane.
Nicaragua was the first Central American country to join CCRIF and this is its third payout. Previous payouts have been$1.1 million following Tropical Cyclone Otto in November 2016 and$500,000 for an earthquake in June of that year.
Since its inception in 2007, CCRIF has made a total of 47 payouts to 14 of its member governments, totalling approximately $174 million.
Nicaragua’s Minister of Finance and Public Credit, Iván Acosta, praised “the excellent work by the team of CCRIF SPC, for their effectiveness in their mission to serve the peoples of Central America and the Caribbean in their moments of greatest need, such as when they face a climatic or catastrophic event.”
CCRIF SPC 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 and Central American 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 member 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 (MDTF) by the Governments of Bermuda and Canada, the UK, France and Ireland, the European Union, the World Bank and the Caribbean Development Bank, as well as through membership fees paid by participating governments.
Caribbean Catastrophe Risk Insurance Facility, CCRIF, Nicaragua, Parametric insurance