The Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC) is set to make a payout of approximately $40 million to the Government of Haiti following a devastating magnitude 7.2 earthquake on August 14.
The earthquake significantly impacted the city of Les Cayes and released approximately twice as much energy as the 7.0 earthquake that affected the country in 2010.
This current payout to Haiti will represent CCRIF’s largest single payout to date. Since the Facility’s inception in 2007, it has made 53 payouts totalling $242.4 million to 16 of its 23 members.
Of these, Haiti has received five payouts totalling $78.3 million (32% of total payouts).
This payout represents the full coverage limit under the country’s parametric insurance policy for earthquakes for the 2021/22 policy year.
CCRIF will provide a first tranche of $15 million within one week of the event and the remaining amount of approximately $25 million within a 14-day window, to allow for the independent verification of the model results.
Haiti will continue to receive earthquake coverage for the remainder of the policy year under a special feature of the earthquake policy known as the Reinstatement of Sum Insured Cover (RSIC).
The RSIC, introduced by CCRIF in 2017, provides access to coverage after the maximum coverage limit of a country’s earthquake or tropical cyclone coverage limit has been reached.
“The payout from CCRIF to the Republic of Haiti following the earthquake on August 14, 2021, will help finance rapid and tangible government activities geared towards supporting the poor and vulnerable affected by the earthquake in the Grand Sud region,” said Haiti’s Minister of the Economy and Finance, Michel Patrick Boisvert.
“Given the proliferation and recurrence of natural disasters, access to parametric insurance policies offered by CCRIF and other risk financing mechanisms makes it possible to better manage the impact of these disasters on public finances and strengthen financial resilience in the medium term.
“For a country like Haiti, which is exposed to multiple natural disaster risks, it is imperative for us to adopt preventive measures to reduce vulnerability to shocks, while improving disaster preparedness and response.”
