CCRIF SPC (for­mer­ly the Caribbean Cat­a­stro­phe Risk In­sur­ance Fa­cil­i­ty) an­nounced to­day that for the sec­ond year in a row, Trinidad & To­ba­go has re­ceived a pay­out on its Ex­cess Rain­fall pol­i­cy fol­low­ing a pe­ri­od of heavy rain­fall in Oc­to­ber.

The Gov­ern­ment re­ceived a pay­out of US$2,534,550 (ap­prox­i­mate­ly TT$17 mil­lion) due to heavy rains be­tween Oc­to­ber 18 and 20 2018.

Trinidad & To­ba­go has been a mem­ber of CCRIF since 2007 and has pur­chased CCRIF poli­cies for trop­i­cal cy­clones and earth­quakes every year since then.

Start­ing in 2017, the Gov­ern­ment be­gan pur­chas­ing cov­er­age for Ex­cess Rain­fall (XSR) and has two sep­a­rate XSR poli­cies in place – one for Trinidad and one for To­ba­go.

Since pur­chas­ing its first ex­cess rain­fall pol­i­cy in 2017, the Gov­ern­ment has re­ceived two pay­outs to­tal­ing ap­prox­i­mate­ly US$9.5 mil­lion (TT$64 mil­lion) – one in Oc­to­ber 2017 when the Gov­ern­ment re­ceived a pay­out of US$7,007,886 fol­low­ing an ex­cess rain­fall event and this cur­rent pay­out.

CCRIF says it is able to make rapid pay­outs be­cause its in­sur­ance prod­ucts are para­met­ric.

This means that pay­ments are made based on the in­ten­si­ty of an event (in this case the vol­ume and dis­tri­b­u­tion of rain­fall) and the amount of loss caused by the event cal­cu­lat­ed in a pre-agreed mod­el.

The haz­ard lev­els are ap­plied to pre-de­fined gov­ern­ment ex­po­sure to pro­duce a loss es­ti­mate.

The mod­elled loss es­ti­mate is then com­pared to three key el­e­ments - at­tach­ment point, ex­haus­tion point, and ced­ing per­cent­age - in the coun­try’s pol­i­cy to de­ter­mine if the pol­i­cy is trig­gered and if so, the val­ue of the pay­out.

These three el­e­ments are se­lect­ed by the gov­ern­ment for each pol­i­cy (earth­quake, trop­i­cal cy­clone and/or ex­cess rain­fall) pur­chased based on the coun­try’s risk pro­file and the amount of pre­mi­um the gov­ern­ment pays.

This pay­out to the Gov­ern­ment of Trinidad & To­ba­go brings the to­tal CCRIF pay­outs to date to al­most US$139 mil­lion to 13 mem­ber gov­ern­ments – all made with­in 14 days of the event.