CCRIF parametric insurance likely triggered for islands impacted by hurricane Beryl

Sources tell us that the parametric tropical cyclone insurance coverage provided to some of the islands of Grenada, St Vincent and the Grenadines by the CCRIF SPC (formerly known as the Caribbean Catastrophic Risk Insurance Facility) is likely to be triggered and payout within the usual two week period.

With some of the islands of St Vincent and the Grenadines having been devastated by major hurricane Beryl’s onslaught over the last couple of days, and Grenada also affected, it is perhaps no surprise that this valuable source of responsive parametric insurance will pay out to help with their recovery.

Small islands such as Union have been particularly badly impacted by hurricane Beryl, with one report saying the majority of that islands population should now be considered homeless.

The terrible toll of the ferocity of Beryl’s winds has demolished homes and businesses and badly impacted core infrastructure such as power facilities on these small islands.

The CCRIF SPC counts Grenada and St. Vincent & the Grenadines as members of its parametric catastrophe insurance facility, and we understand both have tropical cyclone cover under the CCRIF.

Given the wind speeds hurricane Beryl attained as it passed through the Windward Island chain, our sources say a payout is expected to those members affected and nearest to the major hurricanes track.

While Grenada itself and St Vincent avoided the worst of Beryl, they did both experience impacts and damage and so payouts are possible here as well.

It’s important to note that the CCRIF will need to run its models and derive index values, to establish whether hurricane Beryl has indeed triggered its policies. But given the storms severity, we’re being told this is likely a given and at least some payout will be needed.

The CCRIF SPC has made every payout in its history within a two week window after a disaster event, and we expect this will be no different.

It is an extremely valuable source of post-disaster financing and liquidity, that can be a significant benefit to affected countries and help in their recovery.

In its history, the CCRIF SPC has made almost US $144.4 million in payouts for tropical cyclone events, as well as another $50 million for earthquakes and $73 million for excess rainfall.

Hurricane Beryl could trigger the cyclone parametric triggers and also excess rainfall policies, that are also parametric, if any Caribbean nations affected have both in-force.

Now, with Beryl nearing Jamaica, there is a chance that country also benefits from its parametric cyclone and perhaps rainfall insurance under the CCRIF SPC as well.

Also read: Hurricane Beryl forecast path keeps Jamaica catastrophe bond on watch.