Catastrophe insurance policy ‘a novel idea’
Following the introduction of hurricane and earthquake policies for the region in 2007, the Caribbean Catastrophe Risk Insurance Facility (CCRIF) is introducing other policies including one for a particular group of individuals.
Gina Sanguinetti Phillips of Sustainability Managers, which is the corporate communications manager for CCRIF, said countries were keen on keeping their policies,
given the vulnerability of each territory to hurricanes and earthquakes.
So far 16 countries, including Barbados, have acquired either a hurricane or earthquake policy. Some have both.
Sanguinetti Phillips agreed it was a novel idea for the region to have the catastrophe insurance policy, given its vulnerability to natural disasters, especially hurricanes.
The insurance products are parametric in that the country receives a payout based on set parameters as opposed to assessment of damages after a disaster. Each country pays an annual premium and the policy can be renewed every year. She did not disclose the range in premiums each country pays.
The hurricane policy is based on damage from wind and storm surge, not from rain fall.
Sanguinetti Phillips said: “That is a huge gap so we recently came up with an excess rainfall product. So if a country wants it, [it has] to also purchase an excess rainfall policy. That could be triggered outside of a hurricane system as well.”
She told BARBADOS BUSINESS AUTHORITY that discussions were ongoing with a number of countries, including Barbados, about the excess rainfall product, while some countries were also interested in a policy to cover damages from volcano eruptions.
“For the first time, CCRIF is involved in the Livelihood Protection Policy (LPP) geared toward individuals in agriculture, tourism and day labourers. It was launched in St Lucia at the end of May this year and we expect to launch it in Jamaica and Grenada over the next two months then hopefully expand throughout rest of the region,” she said.
“It is being seen as an aid to Government. Instead of people relying on Government to give them money, they are taking care of it themselves and being proactive beforehand and taking steps to reduce their own vulnerabilities,” she explained.
Barbados was one of three countries that received a payout in 2010, following the passage of Tropical Storm Tomas.
Barbados got $17 million, which went towards repairing and rebuilding destroyed homes. Prime Minister Freundel Stuart had said it required approximately $37 million to carry out full repairs. (MM)