Enables regional cat fund to issue excess rainfall insurance
The Caribbean Catastrophe Risk Insurance Facility (CCRIF) and the Caribbean Institute of Meteorology and Hydrology (CIMH) have launched a regional rainfall model.
This synthetic rainfall generation model will enable the provision of excess rainfall insurance policies for Caribbean countries via CCRIF, and will provide a valuable tool for the region aimed at better managing the risks of extreme rainfall events.
CCRIF is the world’s first and only risk pool utilising parametric insurance, giving Caribbean governments the opportunity to purchase earthquake and hurricane catastrophe coverage with lowest-possible pricing. The rainfall model is the basis for a new excess rainfall product which is aimed at helping to reduce the economic consequences of major rainfall events in the region. The development of this product is in direct response to the interest expressed by many CCRIF participating countries and stakeholder partners in making available catastrophe flood coverage. Although not directly mirroring flood losses, CCRIF’s new policy will provide an efficient hedging option for countries against the economic impacts of extreme rainfall events.
The underlying rainfall model was developed for CCRIF by Kinetic Analysis Corporation in collaboration with CIMH, and is housed at and operated 24/7 by CIMH. The model uses a global meteorological database (to which regional agencies provide data) to generate rainfall totals at high resolution across the entire Caribbean four times per day. These data will be made available via CIMH in near real-time, along with a 60-year historical rainfall database derived from the same model. The combined database has many uses beyond that immediately envisaged by CCRIF. For example, the design and implementation of both high and low rainfall parametric insurance policies in the agriculture sector will be facilitated by access to this synthetic rainfall database. It will also be useful to the disaster management community in developing a better understanding of historical flood events and flooding hazards and to the meteorological community in providing another tool with which to track and characterise extreme rainfall events.
Acting Permanent Secretary in the Ministry of Agriculture and Rural Development in Barbados, Barton Clarke, officially launched the model at the offices of CIMH. The launch will take place during a workshop that will bring representatives of the financial, disaster management and meteorology communities from throughout the Caribbean to learn about the new model and discuss options for policy coverage for CCRIF’s new policy year, especially in light of lessons learned from the Haiti earthquake.
Sixteen governments are members of CCRIF: Anguilla, Antigua & Barbuda, Bahamas, Barbados, Belize, Bermuda, Cayman Islands, Dominica, Grenada, Haiti, Jamaica, St. Kitts & Nevis, St. Lucia, St. Vincent & the Grenadines, Trinidad & Tobago and the Turks and Caicos Islands. In 2007, CCRIF paid out almost $1m to the Dominican and St Lucian governments after the November 29 earthquake in the eastern Caribbean; in 2008, CCRIF paid out $6.3m to the Turks & Caicos Islands after Hurricane Ike made a direct hit on Grand Turk; and in 2010, CCRIF paid out $7.75m to the Haitian government after the January 12 earthquake.