CDB grant to cover Haiti 2018-19 cat coverage

The Caribbean Development Bank (CDB) has approved a grant of US$3mn to cover Haiti's 2018-2019 insurance premiums with the CCRIF SPC - the company that provides parametric insurance coverage to the Caribbean and Latin America.

CDB has played an active role in covering Haiti's catastrophic insurance coverage since the deadly impact of 2016's Hurricane Matthew, paying out US$3.5mn to cover the nation's premiums in June 2016.

In a statement, CDB said the funding would help the country meet the cost of the premiums for tropical cyclone, earthquake and excess rainfall coverage to which the government of Haiti will contribute up to US$1.8mn.

CDB project director Daniel Best noted that among the bank's 19 borrowing member countries, Haiti is one of the most vulnerable to natural hazards.

"A large percentage of the population of Haiti is exposed to multiple hazards, due to climate change, the rapid growth of unplanned settlements, and ecosystem degradation and decline. We are pleased that the government of Haiti is collaborating with development partners like CDB to design and implement development projects that focus on reducing the country's risk to natural hazards, and help it adapt to climate change," he said.

In the event of a future disaster, however, Haiti's parametric insurance contract under CCRIF SPC is designed to pay out quickly and reliably.

"This type of insurance can play a unique role in tackling humanitarian emergencies by providing quick liquidity at a time when there is a dramatic reduction in government revenue and, at the same time, a need for large government services expenditures," Best added.

To date, Haiti has received four payouts: one after the 2010 earthquake (US$7.7mn), two following Hurricane Matthew in October 2016 (US$20.4mn under the tropical cyclone policy and US$3.02mn under the excess rainfall policy), and US$162,000 in 2017 for Hurricane Irma. The latter was paid out under the aggregated deductible cover, which provides a minimum payment for events that are objectively not sufficient to trigger a CCRIF SPC policy.

Pictured: Haitian residents after the impact of Hurricane Matthew.