The government of Jamaica is set to receive a record payout of USD 70.8 million (J$11.4 billion) following the passage of Hurricane Melissa, under the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC) parametric insurance model.
This payout marks the fourth payout to Jamaica, bringing the country’s total value of payouts from CCRIF to US$100.9 million. In 2024, Jamaica received US$26.6 million following Hurricane Beryl, and in 2020, a payout was made after Tropical Cyclones Zeta and Eta.
Hurricane Melissa, a Category 5 storm, was the first of this strength to make landfall in Jamaica’s history and among the strongest storms ever recorded in the Atlantic, which has caused total damage and economic losses of $48-52 billion, according to AccuWeather’s preliminary estimates.
For a recap, Hurricane Melissa saw peak winds of 185 mph (298 kph) and a central pressure of 892 mb, surpassing the rare sub-900 mb threshold, last seen with Milton (897 mb) last year.
This has triggered the tropical cyclone payout, with the Jamaican government expected to receive a second payout under its excess rainfall policy, pending final model calculations.
The excess rainfall assessments typically take a few days longer than tropical cyclone evaluations due to the complexity of rainfall distribution and localised impacts, explained the CCRIF. The organisation will confirm the outcome for this potentially additional payout once the modelled loss value is fully validated.
The government currently has coverage from CCRIF for tropical cyclones, excess rainfall, and earthquakes.
Isaac Anthony, Chief Executive Officer, CCRIF, commented, “This payout to Jamaica is not just a financial transaction, it is a reaffirmation of CCRIF’s mission to stand with our members in their most difficult moments. On behalf of the CCRIF Board, Management, and Team, I extend our heartfelt condolences to the people of Jamaica. We are proud to support the Government’s swift response and recovery efforts, and we remain committed to helping build a more resilient and secure future for all.”
Jamaica, a founding member of CCRIF at its establishment in 2007, has long integrated CCRIF’s parametric insurance products covering tropical cyclones, excess rainfall, and earthquakes into its comprehensive disaster risk financing strategy and risk layering framework.
These steps have helped the country be certain of liquidity available in just three days after Hurricane Melissa, with CCRIF’s tropical cyclone policy triggering automatically based on modelled loss values.
Since its inception, CCRIF has made 81 payouts totalling US$462 million to member governments, including the current payout.
CCRIF’s globally recognised parametric insurance model has proven to be both technically sound and economically transformative. Annual coverage has exceeded US$1 billion since 2021 and now stands at US$1.44 billion.
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