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Hurricane payout

Haiti to get US$20 million Insurance payout following Matthew

CCRIF SPC – formerly the Caribbean Catastrophe Risk Insurance Facility – is preparing to make a payout to Haiti’s government as a result of the passage of Hurricane Matthew.

Based on preliminary calculations, Haiti will receive a little over US$20 million – the largest payment ever made by CCRIF.

This was revealed this afternoon by CCRIF Chairman Milo Pearson at the IMF/World Bank Group Annual Meetings.

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.

Since its inception in 2007, CCRIF has made a total of 15 payouts to 10-member governments, totaling US$38.8 million, all within 14 days of events.

The Haiti payment will represent the 16th payout, taking total payouts to US$58.8 million. In 2010, following the devastating earthquake, CCRIF made a payment to the impoverished Caribbean nation 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 that time. The Haitian government used the CCRIF funds to cover salaries of key emergency personnel, “keeping the wheels of government turning.”

Jeremie, Haiti, the main town in the Grand Anse region, was hard hit by Hurricane Matthew. The city had been cut off from communication since the storm. Photo: G. J. Barnes

Jeremie, Haiti, the main town in the Grand Anse region, was hard hit by Hurricane Matthew. The city had been cut off from communication since the storm. Photo: G. J. Barnes

Bridge between Aquin and Cote de Fer in Haiti, after Hurricane Matthew. Photo: Jacqueline Charles

Bridge between Aquin and Cote de Fer in Haiti, after Hurricane Matthew. Photo: Jacqueline Charles

A boy stands inside a church after it was damaged by Hurricane Matthew in Saint-Louis, Haiti.

A boy stands inside a church after it was damaged by Hurricane Matthew in Saint-Louis, Haiti.

CCRIF’s payments are 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.

This parametric insurance enables payouts to be made very quickly after a hazard event, unlike traditional insurance settlements that require an on-the-ground assessment of individual losses before a payment can be made.

Matthew made landfall in Haiti on October 4 as a powerful category 4 hurricane. A United Nations representative to Haiti, Mourad Wahba, said the country was facing its largest humanitarian crisis since the earthquake in 2010 left more than 200,000 dead and tens of thousands living in tents and makeshift dwellings.

More than 100 deaths have been reported so far and Matthew has caused significant damage to the southern coast. The hurricane 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-à-Piment with 1.2 million people, including 522,000 children, affected. Les Cayes has been totally flooded.

Initial estimates suggest that six million children in Haiti will be directly affected by the storm.

“The CCRIF Board and Team extend our condolences to Haiti on the loss of life and extend our support to the government and people of Haiti as they recover from this disaster,” said CCRIF CEO Isaac Anthony who spoke with government officials in Haiti this morning.

“We know that the government welcomes this payment and is looking forward to beginning their recovery efforts.”

But Haiti is not the only country which encountered Matthew that will get a payout. Barbados is in line for almost US$1 million.

Before Matthew reached hurricane status and devastated Haiti, it moved through the islands of the Eastern Caribbean and its centre passed over Barbados on September 28, triggering the island’s CCRIF tropical cyclone policy. Barbados will receive a payout of US$975,000.

According to Barbados’ Department of Emergency Management, there were reports of fallen trees, isolated flooding, power outages and water disruption in some parts of the island.

Both Barbados and Haiti also have excess rainfall policies and could get additional payouts, according to the CCRIF.

It said there is a possibility that other countries in the Eastern Caribbean that were affected by Matthew may receive payouts under their excess rainfall policies.

Tropical cyclone policies are designed to cover damages from wind and storm surge but not rainfall. The model for excess rainfall events requires a few days longer to calculate results and CCRIF will issue new information when that assessment is complete.

One Response to Hurricane payout

  1. Alex Alleyne October 7, 2016 at 11:05 am

    Keeping my eyes on the insurance companies here in BIM who will use this storm to hike fees.

    Reply

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