The government of Jamaica is set to receive a second payout of USD 21.1 million following the passage of Hurricane Melissa, which has triggered the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company’s (CCRIF SPC) excess rainfall parametric insurance policy.
So far, the total payouts to Jamaica from CCRIF amount to USD 91.9 million (J$14.8 billion) following the devastation caused by Hurricane Melissa.
On November 3rd, CCRIF disbursed a portion of the tropical cyclone policy payout of USD 8 million to provide immediate access to quick liquidity. While the leftover USD 62.8 million will be paid by November 13th, aligning with CCRIF’s key value proposition of making payouts within 14 days of an event.
The excess rainfall policy payout will follow the same schedule, post final model verification. Excess rainfall assessments typically take a few days longer than tropical cyclone evaluations due to the complexity of rainfall distribution and localised impacts.
CCRIF’s parametric insurance policies are a key component of Jamaica’s comprehensive disaster risk financing strategy. Currently, the country’s coverage from CCRIF includes tropical cyclones, excess rainfall, and earthquakes.
The organisation’s parametric insurance policies are designed to respond to the intensity of a hazard event, considering the assets exposed, and the modelled losses based on pre-defined models. Since its inception in 2007, CCRIF has made 82 payouts totalling USD 483 million.
The tropical cyclone policy is based on modelled losses from wind and storm surge, and the excess rainfall policy is based on the volume and distribution of rainfall.
Before the payouts for Hurricane Melissa, Jamaica had received three other payouts in previous years on its tropical cyclone and excess rainfall policies for Tropical Cyclones Beryl, Eta, and Zeta.
Isaac Anthony, Chief Executive Officer of CCRIF, plans to visit Jamaica to meet with senior officials to discuss how the organisation can provide further assistance for the country’s recovery efforts while supporting the government in enhancing its financial protection strategy.
According to AccuWeather’s preliminary estimates, Melissa caused $48-52 billion in total damage and economic losses.
Recently, Cotality estimated the total insured losses from the event to be around $1.5 billion, within a range of $1 billion to $2.5 billion, while total property damage from wind, storm surge, and flooding is expected to range between $5 billion and $9 billion.
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