GRAND CAYMAN, Cayman Islands (CMC) — The Caribbean Catastrophe Risk Insurance Facility (CCRIF) Wednesday said it will make a payment of approximately US$40 million to Haiti following the devastating 7.2 earthquake last Saturday that has killed nearly 2,000 people and left several thousand injured and missing.

“This current pay-out to Haiti will represent CCRIF’s largest single pay-out to date. Since the facility’s inception in 2007, it has made 53 pay-outs totalling US$242.4 million to 16 of its 23 members,” it said in a statement.

It said that Haiti has received five pay-outs totalling US$78.3 million and that this recent pay-out is further testimony to the success of the partnership involving member governments, the donors that support CCRIF, and the reinsurance community, in assisting countries to be able to better access disaster risk financing and reduce budget volatility following natural disasters.

“Our thoughts and prayers are with the people of Haiti, cognizant of the multi-hazard environment that they are in. CCRIF is pleased to be able to support Haiti in its time of need, providing these funds that can be used to help address the country’s most urgent priorities,” said CCRIF chief executive officer, Isaac Anthony.

“We continue to closely monitor the overall situation in Haiti, including the passage of Tropical Cyclone Grace and its potential impacts on the country and stand ready to further support our member country and its people in this time of crisis,” he added.

CCRIF said that the payment represents the full coverage limit under the country’s parametric insurance policy for earthquakes for the 2021/22 policy year.

“As CCRIF’s insurance policies are parametric, pay-outs are made within 14 days of an event. To begin to support the people of Haiti as quickly as possible, CCRIF will provide a first tranche of US$15 million to the government within one week of the event and the remaining amount of approximately US$25 million within the 14-day window, to allow for the independent verification of the model results.”

CCRIF said it will continue to provide earthquake coverage to Haiti for the remainder of the policy year which ends on May 31, 2022, under a special feature of the earthquake policy known as the Reinstatement of Sum Insured Cover (RSIC).

The RSIC, introduced by CCRIF in 2017, provides access to coverage after the maximum coverage limit of a country’s earthquake or tropical cyclone coverage limit has been reached.

“The pay-out from CCRIF to the Republic of Haiti following the earthquake on August 14, 2021, will help finance rapid and tangible government activities geared towards supporting the poor and vulnerable affected by the earthquake in the Grand Sud region,” said Haiti’s Minister of the Economy and Finance, Michel Patrick Boisvert,

He said given the proliferation and recurrence of natural disasters, access to parametric insurance policies offered by CCRIF and other risk financing mechanisms makes it possible to better manage the impact of these disasters on public finances and strengthen financial resilience in the medium term.

“For a country like Haiti, which is exposed to multiple natural disaster risks, it is imperative for us to adopt preventive measures to reduce vulnerability to shocks, while improving disaster preparedness and response,” Boisvert added.

CCRIF said Haiti has continued to increase its parametric insurance coverage for earthquakes, with the cumulative increase being about 400 per cent.

“This increased coverage has been made possible through premium support provided initially by the Government of Canada and subsequently by the Caribbean Development Bank, which has paid Haiti’s insurance premiums for earthquakes, tropical cyclones and excess rainfall either fully or in part to better access disaster risk financing and reduce budget volatility following natural disasters.”

Since the start of the 2021 Atlantic Hurricane Season, Haiti has been impacted by both tropical cyclones Elsa and Fred. Haiti received a payment of approximately US$343,000 under the Aggregated Deductible Cover (ADC) of its tropical cyclone policy following Elsa.

The ADC provides a minimum payment for events that are not sufficient to trigger a country’s tropical cyclone policy but for which losses on the ground are registered by a member government.

“Our thoughts and prayers are with the people of Haiti, cognizant of the multi-hazard environment that they are in. CCRIF is pleased to be able to support Haiti in its time of need, providing these funds that can be used to help address the country’s most urgent priorities,” said CCRIF chief executive officer, Isaac Anthony.

“We continue to closely monitor the overall situation in Haiti, including the passage of Tropical Cyclone Grace and its potential impacts on the country and stand ready to further support our member country and its people in this time of crisis,” he added.

The CCRIF said it will continue to support local non-government organisations (NGOs) in Haiti as they work in their communities to build forward stronger, to reduce vulnerability and build resilience within local communities.

CCRIF said it has also provided 11 grants totalling over US$340,000 to NGOs in Haiti to implement projects in disaster risk reduction, climate change adaption and environmental sustainability.

“Accordingly, CCRIF will reach out to its local partners on the ground to determine how the communities in which they operate have been impacted by this recent earthquake and identify additional support the Facility can provide under its Small Grants Programme.”