The government of the Bahamas has received the first tranche of a cash payout of nearly $11 million from Caribbean Catastrophe Risk Insurance Facility (CCRIF) to help deal with the most immediate financial needs in the aftermath of Hurricane Dorian, which caused widespread devastation on the Abaco Islands and Grand Bahama.
The CCRIF aims to provide short-term liquidity after a catastrophe and pays out within 14 days.
In this case, the risk insurance facility made an advance payment of 50% of US$10,936,103 to allow the government to address its most pressing issues immediately. The remainder will be paid within two weeks of the Hurricane making landfall.
The Bahamas has three tropical cyclone policies with CCRIF, each one covering a section or zone of the 700-island archipelago – North West, South East and Central. Dorian triggered the tropical cyclone policy for the North West Zone.
CCRIF CEO, Isaac Anthony, who contacted the Bahamas government about the payout, said “member governments are appreciative of this rapid infusion of quick liquidity through CCRIF payouts from its parametric insurance policies, which they are able to use to address immediate priorities and to support the most vulnerable in their population”.
The parametric insurance products provided by the CCRIF are a disaster risk financing tool that is most applicable for high impact low frequency events.
“The instrument is designed to allow member governments to reduce their budget volatility and to provide some amount of financial resources for emergency relief, such as restoring critical infrastructure and providing assistance to the affected population, thereby assisting to reduce post-disaster resource deficits,” the CCRIF CEO noted.
Fast payouts are possible because, unlike traditional indemnity insurance, CCRIF polices settle quicker based on a pre-agreed model that takes into account the intensity of an event. This is measured, for example, by hurricane wind speed, earthquake intensity or volume of rainfall.
The CCRIF can provide additional support under its technical assistance programme in the form of grants for specific projects after a natural disaster.
The Bahamas was the recipient in 2012 of a technical assistance grant of US$85,000 following the passage of Hurricane Sandy for the construction of a new sea wall at Sandyport Beach. Similar sized grants have been provided to Jamaica for the rehabilitation of the Muirton Boys Home following Hurricane Sandy in 2012, and Dominica for the construction of new fencing at the Douglas-Charles Airport, which was damaged by Tropical Storm Erika in 2016.
The CCRIF board and management will decide on possible technical assistance support to the Bahamas in collaboration with the government in the coming weeks.
The CCRIF said it encourages member countries to use its parametric insurance policies in conjunction with other disaster risk financing instruments to cover different types of risk.
Since CCRIF’s inception in 2007, the facility has made 38 payouts totalling a little over US$139 million to 13 of its 21 member governments. Anthony said, “a rough assessment of the beneficiaries of these payouts show that over 2.5 million persons in the Caribbean and Central America have benefitted directly or indirectly from these payouts after a disaster.”
Meanwhile, several companies with offices in Cayman and the Bahamas have expressed their support for the Bahamas in the wake of Hurricane Dorian.
Scotiabank donated US$100,000 to the Red Cross in support of rescue and relief efforts. “Over the past few days, we have been in close communication with our teams in the Bahamas and the surrounding areas. The scale of the devastation caused by Hurricane Dorian is deeply troubling,” said Brian Porter, Scotiabank’s president and CEO. “We will stand by our employees, customers, and communities in the affected region over the coming days and throughout the rebuilding efforts.”
C&W Communications has allocated US$500,000 through its Cable & Wireless Charitable Foundation for immediate and longer-term relief and restoration efforts in the areas affected by Dorian.
C&W Communications CEO, Inge Smidts, who is the chair of the foundation, also appealed to the public to join the efforts by supporting a fundraising campaign. “We are urging our customers, employees and business partners to help us support the people of The Bahamas in this very challenging time. The donations will go towards the immediate relief effort and long-term rebuilding programs.”
Anyone wishing to donate can visit: www.cwc.com/live/corporate-responsibility/cable-wireless-foundation/support-hurricane-dorian-relief.html to make a contribution.