Haiti will likely have a significant claim against the Caribbean Catastrophic Risk Insurance Facility (CCRIF) following the recent earthquake, according to Simon Young, PhD, CEO of CaribRM.
CaribRM is a risk consulting firm that focuses on the Caribbean region and also acts as facility supervisor for the CCRIF.
“We’ve already done a preliminary calculation and Haiti could see a significant payout,” says Young. “Haiti did not have as much earthquake cover as hurricane, but that is typical of the region.”
Earlier today, the United States Geological Survey reported that a magnitude 7.0 quake struck about 10 miles southwest of the Haitian capital Port-au-Prince.
The CCRIF was created in 2007 as a parametric catastrophe pool by 17 regional governments and the World Bank.
Young described today’s earthquake as a fifty to one hundred year event for the northern section of the Caribbean Arc, a geological boundary within the region.
Given that the quake occurred in a developing region, Young said he expects a majority of recovery and rebuilding funds to come from the public sector.
However, he adds that today’s event will also cause a reconsideration of earthquake risk in the Caribbean.
“There will be a lot of rethinking about the role of insurance and risk transfer and quake risks, especially given it was a very quiet hurricane season,” Young says.
