The Government of Panama has received a US$26.7 million payout from CCRIF SPC, a regional parametric insurance provider, following an extreme rainfall event that occurred from Oct. 31 to Nov. 4. According to a news release, the rainfall caused severe flooding, landslides, infrastructure damage, and crop loss, affecting 1,500 people and claiming 11 lives. CCRIF’s rapid disbursement was made within 14 days of the event.
Francisco Álvarez, director of the Directorate of Investments, Concessions and State Risks (DICRE), emphasized the importance of CCRIF policies in Panama’s disaster risk management strategy. “Parametric insurance allows the State to respond quickly to emergencies caused by phenomena such as excess rainfall, mitigating their fiscal and social impact,” Álvarez said.
Panama maintains parametric insurance coverage for both excess rainfall and earthquakes and supplements these policies with contingent credit lines from international financial institutions, the news release noted.
Unlike traditional insurance, CCRIF’s parametric insurance triggers payouts based on pre-agreed metrics, such as rainfall volume or seismic intensity, without requiring on-the-ground assessments of damages. CCRIF CEO Isaac Anthony, speaking at COP29 in Baku, Azerbaijan, highlighted the increasing need for disaster financing tools amid climate change.
“Parametric insurance covers more than physical damage; it also covers economic exposure, thereby helping governments so they do not need to halt social and development programmes to address immediate needs post disaster,” Anthony said.
The recent payout is the second significant disbursement Panama has received from CCRIF in recent years. In 2020, following Hurricane Eta, the government received US$2.7 million, which was used for humanitarian aid, road repairs, and support for affected farmers. The US$26.7 million payout brings CCRIF’s total payouts for this policy year to 13, amounting to US$385.2 million since its inception in 2007.
As climate-related disasters increase in frequency and intensity, parametric insurance is gaining prominence as a key tool in loss and damage strategies.
Established in 2007, CCRIF SPC provides parametric insurance coverage for hurricanes, earthquakes, and excess rainfall to 30 members across the Caribbean and Central America. The organization, developed with support from the World Bank and international donors, enables rapid financial assistance to member governments following natural disasters.
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