CDB to fund Haiti’s insurance against natural hazards
The Board of Directors of the Caribbean Development Bank (CDB) has today approved funding for the full premium for natural hazard insurance for Haiti. The Bank is providing US$6.9 million as a grant on a one-time request by the Haitian Government to cover the premium of the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC) for the period 2021/22.
“Haiti faces serious challenges due to the combined shocks of natural disasters, the COVID-19 pandemic, climate change, political instability, and the heightened insecurity in several parts of the country, which contribute to financial uncertainty. The Caribbean Development Bank is supporting the Government and people of Haiti as they negotiate these times of unprecedented challenges,” said CDB Vice-President of Operations, Isaac Solomon.
Haiti suffered its latest disaster in August this year, with the occurrence of a 7.2 magnitude earthquake, epicentred in the southwest peninsula, close to Les Cayes. The event resulted in 2,248 deaths while 12,763 persons sustained injuries and 329 persons are missing. More than 52,950 houses were destroyed, and over 77,000 were damaged in the three most affected areas Sud, Grand Anse and Nippes. In total, some 690,000 persons were displaced.
This event triggered the largest single pay-out by CCRIF SPC, with a total of US$40 million.
Having been a member of CCRIF SPC, co-founded by CDB, since its start in 2007, Haiti partly covered its annual insurance premium since 2018. However, the Haitian Government is unable to contribute to the payment of the CCRIF SPC premium this policy year due to the impact of the ongoing COVID-19 pandemic among other social and economic challenges.
CCRIF SPC has enabled CDB’s Borrowing Member Countries to purchase catastrophe risk insurance at 40-50% less than the cost they would incur had they approached the insurance market individually.
Haiti is ranked among the world’s most hazard prone countries, being at risk for hurricanes, storms, floods, droughts, earthquakes, and landslides. Having been affected by numerous major natural disasters, Haiti lost an estimated 2% of annual gross domestic product on average between 1976 and 2020 while nearly three in four households were economically impacted by at least one shock annually.