The Caribbean Catastrophe Risk Insurance Facility (CCRIF) announced that eight member countries have purchased its excess rainfall insurance coverage for the 2014-2015 to cover extreme high rainfall events of short duration, whether or not linked to a hurricane, as part of their efforts to proactively manage contingent risks posed by climate change.
4 August 2014: The Caribbean Catastrophe Risk Insurance Facility (CCRIF) has announced that eight member countries have purchased its excess rainfall insurance coverage for 2014-2015.
The excess rainfall product was developed by CCRIF and its reinsurer partner, Swiss Re, to cover extreme high rainfall events of short duration, lasting anywhere from a few hours to a few days, regardless of whether or not the rainfall occurs during a hurricane. The product is parametric, meaning that it does not indemnify the actual loss, but rather pays out when defined triggers are met. In the case of the CCRIF product, probable impact estimates are based on satellite rainfall data from the Tropical Rainfall Measurement Mission (TRMM) created by the US National Aeronautics and Space Agency (NASA) and the Japan Aerospace Exploration Agency (JAXA), and probable exposure by using CCRIF’s risk estimation database. Because it is a parametric product that does not require time-consuming on-site damage and loss assessments, CCRIF’s excess rainfall product can payout within 14 days.
In announcing the launch of the product, CCRIF CEO Isaac Anthony noted the importance of having a product that allows Caribbean Governments to respond quickly to the considerable damage caused to their countries by heavy rainfall and flooding events. Martyn Parker, Chair of Global Partnerships at Swiss Re, stressed the role excess rainfall insurance will play in helping Caribbean Governments proactively manage contingent risks posed by climate change.
CCRIF is a not-for-profit partnership among Caribbean Governments that provides parametric insurance in the event of catastrophic seismic activity, tropical storms or excess rainfall. Payouts since CCRIF’s creation seven years ago have totaled over US$32 million. [CCRIF Press Release]