GRAND CAYMAN, Cayman Islands — The Caribbean Catastrophe Risk Financing Facility (CCRIF) will make a payout of US$10.7 million to the government of Nicaragua following the passage of Tropical Cyclone Eta. As is customary and part of the Facility’s customer proposition, all payouts are made within 14 days of the event. Indeed, CCRIF has already paid an advance of US$3.7 million to the government of Nicaragua, with the remainder to be paid by November 19, following verification of the final model results.
Both the country’s tropical cyclone and excess rainfall parametric insurance policies were triggered due to tropical cyclone Eta. Eta was the 29th and most powerful tropical cyclone of the 2020 Atlantic Hurricane Season and made landfall in Nicaragua as a category 4 hurricane, bringing catastrophic winds, storm surge and rainfall.
On the announcement of the payout, Nicaragua’s minister of finance and public credit, His Excellency Iván Acosta commented: “We want to extend our recognition for the excellent work by the team of CCRIF SPC, for their effectiveness in their mission to serve the peoples of Central America and the Caribbean in their moments of greatest need, such as when they face a climatic or catastrophic event.”
This is Nicaragua’s third payout from CCRIF. Previous payouts have been US$1.1 million following Tropical Cyclone Otto in November 2016 and US$500,000 for an earthquake in June of that year. Nicaragua was the first Central American country to join CCRIF, doing so immediately following the signing in 2015 of a Memorandum of Understanding (MOU) between CCRIF and the Council of Ministers of Finance of Central America, Panama and the Dominican Republic (COSEFIN). While CCRIF was established for Caribbean governments, this MOU enabled Central American countries to join the Facility. Two other Central American governments – Guatemala and Panama – also are members of CCRIF.
According to the preliminary assessments provided by Nicaragua’s National Disaster Prevention System (SINAPRED), hurricane Eta generated much damage and destruction as it passed through northern Nicaragua, severely affecting the country’s North Caribbean Coast Autonomous region. Reports from local and regional sources indicated that Hurricane Eta resulted in over 1,700 homes being affected, with 803 partially damaged and 77 destroyed; 1,500 families being evacuated; 30,000 people accessing shelters with some subsequent damage to shelters caused by high winds; interruptions of electric power that affected approximately 50,000 persons; the municipalities of Waspam and Puerto Cabezas being cut off due to the overflow of the Wawa River; and many other communities being affected by flooding.
Tropical Cyclone Eta affected to a lesser extent five other CCRIF member countries in Central America and the Caribbean: Guatemala, Belize, the Cayman Islands, Jamaica, and The Bahamas.
The 2020 Atlantic hurricane Season, which will end on November 30, is the most active Atlantic hurricane season on record in terms of the number of tropical cyclones – so far recording 30 named storms, 13 hurricanes, and 6 major hurricanes – and, along with the 2005 season, is the only hurricane season to feature the Greek letter storm-naming system. Also, whilst the hurricane season officially starts on June 1 each year, the 2020 season witnessed pre-season cyclones Arthur and Bertha on May 16 and 27 respectively.
Reflecting on the impacts of the 2020 hurricane season and specifically Tropical Cyclone Eta, CCRIF chief executive officer, Isaac Anthony, stated: “CCRIF extends sympathies to the government and people of Nicaragua for the losses incurred due to Tropical Cyclone Eta and as well as to our other member governments and other countries that were impacted by this event. The Facility stands ready to support the governments affected in their immediate recovery and longer-term rehabilitation efforts”.