A Caribbean risk pool supported by Bermuda has paid out a total of $3.4 million to the governments of Antigua & Barbuda and the British Virgin Islands after Tropical Storm Philippe.

The segregated portfolio company, owned, operated and registered in the Caribbean, limits the financial impact of catastrophic hurricanes, earthquakes and excess rainfall events to Caribbean and Central American governments by quickly (within 14 days) providing short-term liquidity when a parametric insurance policy is triggered.

The Caribbean Catastrophe Risk Insurance Facility SPC made two payments after Philippe made landfall on Antigua and Barbuda on October 2 and passed near the British Virgin Islands on October 4, causing heavy rains and flooding in both countries.

CCRIF made payouts on these countries’ parametric insurance policies for Excess Rainfall as follows:

• Antigua and Barbuda: US$2,880,424

• British Virgin Islands: US$552,297

It was CCRIF’s first payout to BVI, but the third to the Government of Antigua and Barbuda following Tropical Cyclone Irma in 2017 and an excess rainfall event in 2022.

Bermuda is one of 26 members, mostly Caricom countries in what was the first multi-country risk pool in the world

Speaking to each of the two governments about the confirmed payouts, CCRIF chief executive Isaac Anthony reiterated that each country can use its payout to address urgent priorities.

He counsels all member countries that investment in CCRIF’s catastrophe risk insurance each year is an important part of their comprehensive disaster risk management strategies because CCRIF payouts help to close the protection gap, reduce budget volatilities associated with exogenous shocks and allow governments to address the country’s most urgent needs.

He said: “While payouts are often used to address immediate needs after a disaster, governments can also implement activities to increase resilience against future hazard events, build back better and enhance social protection systems to become more shock-responsive.”

The facility said: “These two payouts bring the total CCRIF payouts since its inception in 2007 to $265 million.

“CCRIF has made 62 payouts to 17 of its 26 members. Throughout the years, CCRIF member governments have used payouts to address immediate needs post disaster – from providing food, water, and medicines to the most vulnerable, to clearing roads and fixing bridges.

“Payouts have also been used for repairing and improving critical infrastructure such as schools and water treatment plants and supporting sectors such as tourism and agriculture.

“CCRIF continues to monitor the hurricane season which, according to Philip Klotzback from Colorado State University, has now produced 91 named storm days – the eighth most through October 19 on record.”

CCRIF was watching Tropical Storm Tammy, which was forecasted to impact several CCRIF member countries over the weekend, including Antigua and Barbuda, Montserrat, St Kitts and Nevis, Anguilla and St Maarten.

A country’s CCRIF policy is triggered when the modelled loss for a hazard event in that country equals or exceeds the attachment point (similar to a deductible in a traditional insurance contract) selected by the country, which is specified in the policy contract between CCRIF and the country.

Unlike traditional indemnity insurance policies, CCRIF’s parametric insurance policies make payments based on the intensity of a natural hazard event (for example, hurricane wind speed, earthquake intensity, or volume of rainfall); the exposure or assets affected by the event; and the amount of loss caused by the event, calculated in a pre-agreed model.

CCRIF does not need to wait for countries to make claims based on an on-the-ground assessment of loss and damage and can disburse funds quickly to members if their policies are triggered.