Govt gets flood $$

GOVERNMENT has received a payout of US$2,534,550 (approximately $17 million) from the Caribbean Catastrophe Risk Insurance Facility (CCRIF) to assist with relief efforts after last weekend’s floods.

On October 22, Finance Minister Colm Imbert said his ministry requested the CCRIF urgently disburse funds under TT's catastrophe insurance policy.

In a statement yesterday, the CCRIF said this payout represented the second year in a row that TT ad received a payout on its excess rainfall policy after a period of heavy rainfall in October.

TT has been a member of CCRIF since 2007 and has bought CCRIF policies for tropical cyclones and earthquakes every year since then. The CCRIF said starting last year, the Government began buying coverage for excess rainfall (XSR) and has two separate XSR policies in place – one for Trinidad and one for Tobago.

Since acquiring its first excess rainfall policy in 2017, the Government has received two payouts totalling approximately US$9.5 million ($64 million). The first was the October 2017 payout of US$7,007,886. The second payout is the current one for last month’s floods.

CRIF explained it is able to make rapid payouts because its insurance products are parametric.

“This means that payments are made based on the intensity of an event (in this case the volume and distribution of rainfall) and the amount of loss caused by the event calculated in a pre-agreed model,” CCRIF said.

The hazard levels are applied to pre-defined government exposure to produce a loss estimate. The modelled loss estimate is then compared to three key elements – attachment point, exhaustion point, and ceding percentage – in the country’s policy to determine if the policy is triggered and if so, the value of the payout.

Each year, before the start of a new policy year in June, CCRIF said it meets with its member governments to discuss details of the CCRIF coverage they wish to buy for the upcoming year. Member governments are also given updates and information related to model changes and enhancement and the full range of CCRIF’s products and services, as well as new products being developed, while at the same time CCRIF seeks to enhance members’ understanding of the importance of risk transfer and its relationship with financial protection and sustainability.

CCRIF met with the Government in May.