CCRIF and CIMH to launch excess rainfall model for new insurance policy

No. 59 Friday, February 26, 2010
The Caribbean Catastrophe Risk Insurance Facility (CCRIF) and the Caribbean Institute of Meteorology and Hydrology (CIMH) are launching their Regional Rainfall Model on Thursday, 25 Febru­ary, 2010 at CIMH in Husbands, Barbados.

   This synthetic rainfall generation model will enable the provision of excess rainfall insurance policies for Caribbean countries via CCRIF, and 'will provide a valuable tool for the region aimed at better manag­ing the risks of extreme rainfall events.
   CCRIF is the world's first and only risk pool utilising paramet­ric insurance, giving Caribbean governments the opportunity to purchase earthquake and hur­ricane catastrophe coverage with lowest-possible pricing. The rainfall model is the basis for a new excess rainfall product which is aimed at helping to re­duce the economic consequences of major rainfall events in the region. The development of this product is in direct response to the interest expressed by many CCRIF participating countries and stakeholder partners in mak­ing available catastrophe flood coverage. Although not directly mirroring flood losses, CCRIF's new policy will provide an ef­ficient hedging option for countries against the economic impacts of extreme rainfall events.
   The underlying rainfall model was developed for CCRIF by Kinetic Analysis Corporation in collaboration with CIMH, and is housed at and operated 24/7 by CIMH. The model uses a global meteorological database (to which regional agencies provide data) to generate rainfall totals at high resolution across the entire Carib­bean four times per day. These data will be made available via CIMH in near real-time, along with a 60­year historical rainfall database derived from the same model. The combined database has many uses beyond that immediately envis­aged by CCRIF. For example, the design and implementation of both high and low rainfall parametric insurance policies in the agriculture sector will be facilitated by access to this synthetic rainfall database. It will also be useful to the disaster management community in devel­oping a better understanding of historical flood events and flooding hazards and to the meteorological community in providing another tool with which to track and charac­terise extreme rainfall events.
   Acting Permanent Secretary in the Ministry of Agriculture and Rural Development in Barbados, Mr. Barton Clarke, will officially launch the model at the offices of CIMH. The launch will take place during a workshop that will bring representatives of the financial, di­saster management and meteorol­ogy communities from throughout the Caribbean to learn about the new model and discuss options for policy coverage for CCRIF's new policy year, especially in light of lessons learned from the Haiti earthquake.
   CCRIF is a risk pooling facility, owned, operated and registered in the Caribbean for Caribbean governments. It is designed to limit the financial impact of catastrophic hurricanes and earthquakes to Caribbean governments by quickly providing short term liquidity when a policy is triggered. It is the world's first and, to date, only regional fund utilising parametric insurance, giving Caribbean gov­ernments the unique opportunity to purchase earthquake and hur­ricane catastrophe coverage with lowest-possible pricing. CCRIF represents a paradigm shift in the way govermnents treat risk, with Caribbean governments leading the way in pre-disaster planning.
   Sixteen governments are mem­bers of the fund: Anguilla, Antigua & Barbuda, Bahamas, Barbados, Belize, Bermuda, Cayman Islands, Dominica, Grenada, Haiti, Jamaica, St. Kitts & Nevis, St. Lucia, St. Vincent & the Grenadines, Trinidad & Tobago and the Turks and Caicos Islands. In 2007, CCRIF paid out almost $1 million to the Dominican and St Lucian governments after the November 29 earthquake in the eastern Caribbean; in 2008, CCRIF paid out $6.3 million to the Turks & Caicos Islands after Hurricane Ike made a direct hit on Grand Turk; and in 2010, CCRIF paid out $7.75 million to the Haitian government after the January 12 earthquake.
   The Caribbean Institute for Meteorology and Hydrology (CIMH) is a training and research organisation created to improve the meteorological and hydro­logical services for the economic' well-being of Caribbean countries. CIMH provides training, research and investigations, and specialised services and advice, Students from all parts of the Caribbean, and sometimes beyond, are trained in such branches or meteorology as weather observing, forecasting, radar and satellite meteorology, instrument maintenance, agrometeorology, and climatology, and in operational hydrology. A key service provided by CIMH is to collect, analyse, and publish meteorological and hydrological data for use by all countries in the region.