Tropical Storm Amanda, which recently triggered insurance payouts for El Salvador and Guatemala, was a “critical test” of the index-based insurance cover these countries have in place, according to the Microinsurance Catastrophe Risk Organization (MiCRO).
MiCRO designed the excess rainfall coverages that triggered the payouts in collaboration with its local partners and with the support of Swiss Re.
Extreme rainfall from May 27 to June 6 caused by Tropical Storm Amanda left in El Salvador at least 15 people dead, several missing, dozens of evacuees and extensive material and financial losses, directly affecting more than 120,000 people.
Although less impacting, in Guatemala losses were also registered in 12 departments with at least two people dead, more than 40,000 affected, and more than 150 who had to be evacuated from their homes and taken to shelters, mainly due to floods and landslides.
“Once again, this unfortunate disaster reminds us of the need for tools to manage risk adequately and, in fact, this event was a critical test to demonstrate the value of insurance such as that implemented by MiCRO, Seguros Futuro and the Banco de Fomento Agropecuario two years ago for El Salvador”, said Iker Llabrés, MiCRO’s Head of Growth for El Salvador.
Jorge Barrientos, the Head of Growth for Guatemala at MiCRO, added: “It is an inclusive insurance that operates based on predetermined parameters and protects clients against excess rain, in addition to drought and earthquake.”
In El Salvador, given a high concentration of policyholders in the most affected areas, almost 90% of insured clients received payments of 35-40% on average, with payments reaching up to 100% of the sum insured in the highest impacted areas.
Meanwhile, in Guatemala the level of rainfall registered was lower and payouts of up to 50% of the sum insured were triggered, benefiting 15% of the total portfolio of insureds in that country.
MiCRO is a socially oriented enterprise with operations in Latin America. It is supported by Mercy Corps, the Swiss Agency for Development and Cooperation, the Climate Adaptation Platform managed by KfW and Swiss Re.
