GRAND CAYMAN, Cayman Islands –The Caribbean Catastrophic Risk Insurance Facility (CCRIF) Tuesday said it would make a payment of US$10.7 million to the Nicaragua government following the destruction caused by the passage of a Tropical Cyclone.
“As is customary and part of the Facility’s customer proposition, all payouts are made within 14 days of the event. Indeed, CCRIF has already paid an advance of US$3.7 million to the government of Nicaragua, with the remainder to be paid by November 19, following verification of the final model results,” the segregated portfolio company, owned, operated and registered in the Caribbean.
CCRIF said both the country’s tropical cyclone and excess rainfall parametric insurance policies were triggered due to the storm, which has since become the most powerful tropical cyclone of the 2020 Atlantic Hurricane Season.
It made landfall in Nicaragua as a Category 4 hurricane, bringing catastrophic winds, storm surge, and rainfall.
“We want to extend our recognition for the excellent work by the team of CCRIF SPC, for their effectiveness in their mission to serve the peoples of Central America and the Caribbean in their moments of greatest need, such as when they face a climatic or catastrophic event,” said Nicaragua’s Minister of Finance and Public Credit, Iván Acosta.
Since its inception in 2007, CCRIF has made 47 payouts to 14 of its member governments, totaling approximately US$174 million.
CCRIF said its payouts provide quick liquidity to governments immediately following a natural disaster, allowing them to address their most immediate needs.
It said that the payment is the third for Nicaragua, having earlier received payouts of US$1.1 million following Tropical Cyclone Otto in November 2016 and US$500,000 for an earthquake in June of that year.
“CCRIF extends sympathies to the Government and people of Nicaragua for the losses incurred due to Tropical Cyclone Eta and as well as to our other member governments and other countries that were impacted by this event. The Facility stands ready to support the governments affected in their immediate recovery and longer-term rehabilitation efforts,” said CCRIF chief executive officer, Isaac Anthony.
Nicaragua was the first Central American country to join CCRIF, doing so immediately following the signing in 2015 of a Memorandum of Understanding (MOU) between CCRIF and the Council of Ministers of Finance of Central America, Panama and the Dominican Republic (COSEFIN).
While CCRIF was established for Caribbean governments, the MOU enabled Central American countries to join the Facility. Two other Central American governments – Guatemala and Panama – also are members of CCRIF.
The CCRIF said that Tropical Storm Eta affected to a lesser extent five other CCRIF member countries in Central America and the Caribbean, namely Guatemala, Belize, the Cayman Islands, Jamaica, and The Bahamas.
The 2020 Atlantic Hurricane Season, which will end on November 30, is the most active Atlantic hurricane season on record in terms of the number of tropical cyclones – so far recording 30 named storms, 13 hurricanes, and 6 major hurricanes – and, along with the 2005 season, is the only hurricane season to feature the Greek letter storm-naming system.
While the hurricane season officially starts on June 1 each year, the 2020 season witnessed pre-season cyclones, Arthur and Bertha, on May 16 and 27 respectively.
CCRIF said that 2020 had been an extraordinary year globally, and more so for countries in the Caribbean and Central America, which are not only grappling with the effects of the coronavirus (COVID-19) pandemic but also with the impacts of climate change.
“CCRIF member governments have been confronted with the dual effects of increasing damage and loss due to the frequency and intensity of tropical cyclones as well as a range of socioeconomic impacts as a result of COVID-19, all within the context of diminishing fiscal space and a not so positive economic outlook.”
It said that as part of its response to the COVID-19 pandemic, CCRIF engaged early in the year with the donor community to access support for its members, also assisting in covering portions of their CCRIF parametric insurance costs for the 2020/21 and 2021/22 policy years.