Hurricane Irene was not a triggering event for member countries of the Caribbean Catastrophe Risk Insurance Facility (CCRIF), however the storm’s track may portend a particularly dangerous period for the regional catastrophe fund.
Six member countries of the CCRIF — Bahamas, Turks and Caicos Islands, St. Kitts & Nevis, Anguilla, Antigua & Barbuda and Haiti — all experienced losses from the storm but the damage did not did not rise to the CRIFF’s modeled attachment point.
The CCRIF conducts a preliminary calculation immediately after an event, with a final calculation within two weeks. If the loss triggers above the attachment point for a country then a payment is made.
Simon Young, CEO of Caribbean Risk Managers Ltd., explains that Hurricane Irene was a near miss for many Caribbean. “Turks and Caicos are lucky: 50 miles to the east and there would have been major losses. And if Hurricane Irene had moved between 50 and 100 miles to the west, it would have been a major event in the Bahamas.”
The region may not be so lucky in the near future, Young adds. “The next two weeks will be the peak and this storm’s track suggests more than a few hurricanes will push up in into the Atlantic early,” Young says. “We anticipate it will be a busy September.”
Since the CCRIF was created in 2007, eight policies have been triggered in seven member countries resulting in a total payout of over $32 million, according to the fund’s statistics. Five of those triggering events were hurricanes, with the remaining losses attributed to earthquakes.