Guatemala & Belize: CCRIF Financially Supports Governments with Pay-Outs of Parametric Insurance after Extreme Rainfalls
Extensive rainfalls challenged Guatemala for nine days and Belize for three days starting at the end of May. The tropical storm Amanda hit the Pacific coast on May 31 and turned into a disaster one day later, the rare cross-over tropical cyclone Cristobal with origins in the Pacific Basin. Devastating rainfalls resulted from this doubled natural catastrophe.
For faster recovery from the negative consequences of this disaster, the Caribbean Catastrophe Risk Insurance Facility (CCRIF) paid the Government of Guatemala approximately US$3.6 million under its excess rainfall parametric insurance policy. Guatemala became a member of CCRIF in 2019 and is receiving a pay-out within its first year of joining the facility. The Government of Belize received a pay-out of US$203,136 on its excess rainfall parametric insurance policy. For Belize, this is the second pay-out from CCRIF after the Government received US$261,073 following Tropical Cyclone Earl in 2016 for immediate clean-up and recovery.
It is the 43rd pay-out from CCRIF to member governments since 2007 in 21 different weather events, including earthquakes, tropical cyclones, and excess rainfall. CCRIF currently has 22 member governments of which three are from Central America – Nicaragua, Panama, and Guatemala. CCRIF’s pay-outs are made within 14 days of an event, allowing governments to cope and adapt to these disasters. Including the rainfalls in Guatemala, CCRIF paid a total of approx. US$156 million to parametric insurance policies.
The CCRIF is one of the regional risk pools within the framework of the InsuResilience Global Partnership. It limits the financial impact of catastrophic hurricanes, earthquakes and excess rainfall events to the Caribbean and – since 2015 – Central American governments by quickly providing short-term liquidity when a parametric insurance policy is triggered. The regional fund utilizes parametric insurance, allowing member governments the opportunity to purchase earthquake, hurricane and excess rainfall catastrophe coverage with lowest-possible pricing.