CCRIF makes $26.7m parametric rainfall insurance payout to Panama

The CCRIF SPC (formerly known as the Caribbean Catastrophe Risk Insurance Facility) has paid the Government of Panama US $26.7 million after the countries parametric rainfall insurance policy was triggered following a recent severe event, which takes payouts made for the current policy year to almost US $118 million.

The rainfall event affected Panama between October 31st and November 4th 2024, causing landslides, flooding, fallen trees, the collapse of some bridges and loss of crops while 1,500 people were negatively affected, and 11 people lost their lives due to heavy rains this month.

As with every parametric insurance payout CCRIF has made, the funds were transferred to the Government of Panama within 14 days of the rainfall event.

Francisco Álvarez, Director at the Directorate of Investments, Concessions and State Risks (DICRE) of Panama highlighted the importance of the parametric insurance.

Panama sees its CCRIF coverage as part of a national strategy to protect the country against natural disasters, which includes disaster risk financing tools for both risk transfer and risk retention to financially protect the country’s economy.

Panama has contingent credit lines from the World Bank and the Inter-American Development Bank as well is its two CCRIF parametric insurance policies, one for excess rainfall and one policy for earthquakes.

Álvarez stated, “Parametric insurance allows the State to respond quickly to emergencies caused by phenomena such as excess rainfall, mitigating their fiscal and social impact.”

The CCRIF has now made 13 parametric insurance payouts this policy year, which started on June 1st 2024, with one payout of US $6.4 million to Guatemala after a rainfall event in June and 10 payouts totalling US $84.5 million following Hurricane Beryl.

Since launching in 2007, CCRIF has made 77 payouts, totalling US $385.2 million, while its members now typically cede over US $1 billion of risk to the parametric insurance risk pooling facility, with the total increasing 10% for the current policy year.