Government of Honduras Receives Payout from CCRIF for Excess Rainfall Event

The Government of Honduras received a payout of US$4,665,090 within 14 days of an excess rainfall event that affected the country from November 14 to 19.

Background

Honduras joined CCRIF earlier this year, purchasing parametric insurance coverage for excess rainfall, effective June 1, 2024.

Minister’s Statement

“On behalf of the Government led by our President Xiomara Castro, we express our gratitude to CCRIF for the disbursement received under our excess rainfall policy, which was triggered due to the impacts and damages associated with Tropical Storm Sara. Without a doubt, this type of instrument strengthens financial resilience and, compared to others, provides us with the ability to respond more immediately during an emergency’s humanitarian assistance and rehabilitation phase. Additionally, it enables us to reach our affected population promptly and effectively”, said Minister of Finance Christian Duarte.

CCRIF CEO’s Statement

“I am pleased that Honduras decided to join CCRIF, and I look forward to continuing to engage with the Government as it accesses CCRIF parametric insurance as an effective means of closing the protection gap and strengthening the country’s public financial management framework. Access to excess rainfall parametric insurance and accompanying payouts when the policy is triggered will allow the Government the flexibility to begin recovery efforts immediately following a natural disaster. Payouts received within 14 days of an event can be used to address the country’s most urgent needs, including helping vulnerable populations or rehabilitating critical infrastructure among other areas.” said Isaac Anthony, CEO of CCRIF.

Impact of the Event

According to reports, the rainfall event in Honduras significantly impacted roads, cutting off several communities and negatively impacting many people.

CCRIF’s Performance

Since its inception in 2007, CCRIF has made 78 payouts, approximately US$390 million. Since June 1, the start of the 2024/2025 CCRIF Policy Year, three of CCRIF’s four Central American members have received payouts for excess rainfall events.

Other Payouts

Earlier in November, the Government of Panama received a payout from CCRIF totaling US$26.7 million. At the start of the policy year in June, the Government of Guatemala received a full payout under its excess rainfall policy of US$6,376,184 following heavy rains that occurred in that country from June 13 to 19, 2024. On the Caribbean side, since the start of the policy year, CCRIF has made ten payouts totaling US$84.5 million following Hurricane Beryl.

CCRIF’s Growth

When CCRIF was established in 2007, it originally provided parametric insurance coverage for tropical cyclones and earthquakes to 16 Caribbean member governments. Today, CCRIF has 30 members: 19 Caribbean governments, four Central American governments, three Caribbean electric utility companies, three water utility companies, and one Caribbean tourist attraction.

Conclusion

The Government of Honduras’s receipt of a payout from CCRIF is a testament to the effectiveness of parametric insurance in providing financial protection against natural disasters. CCRIF’s ability to provide quick and timely payouts enables governments to respond more effectively to emergencies and to provide relief to affected communities.

Frequently Asked Questions

Q: What is CCRIF?
A: CCRIF is a parametric insurance fund that provides financial protection against natural disasters to its member governments.

Q: How does CCRIF work?
A: CCRIF provides parametric insurance coverage to its member governments, which triggers payouts when a specified event occurs (e.g. excess rainfall).

Q: What types of events does CCRIF cover?
A: CCRIF provides coverage for tropical cyclones, earthquakes, and excess rainfall.

Q: How many payouts has CCRIF made?
A: Since its inception in 2007, CCRIF has made 78 payouts, approximately US$390 million.

Q: What is the purpose of CCRIF?
A: The purpose of CCRIF is to provide financial protection against natural disasters to its member governments, enabling them to respond more effectively to emergencies and to provide relief to affected communities.