The Caribbean Development Bank (CDB) has approved a grant of USD3 million (mn) to cover Haiti’s 2018-2019 insurance premiums with CCRIF SPC—the company that provides parametric insurance coverage to the Caribbean and Latin America.
According to a release from the CDB, the Bank’s funding will 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 USD1.8 mn.
CDB’s Director of Projects, Daniel Best said 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.
Given the country’s fragility and high vulnerability to natural hazards, in its 2017-2021 Country Strategy for Haiti, CDB committed to continue paying the country’s annual CCRIF SPC premiums.
Further, in the most recent negotiations for the replenishment of the Bank’s Special Development Fund, contributors agreed that there should be a continuation of the grant-supported programme of assistance for Haiti. Disaster risk reduction is among the main areas in which CDB will invest.
In 2017, CDB approved a disaster risk reduction and climate adaptation initiative for Ile-à-Vache, an island off the south coast of the southern peninsula of Haiti, which suffered extensive damage from Hurricane Matthew.
To date, Haiti has received four payouts: one after the 2010 earthquake (USD7.7 mn), two following Hurricane Matthew in October 2016 (USD20.39 mn under the tropical cyclone policy and USD3.02 mn under the excess rainfall policy), and USD162,000 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.