CCRIF/Swiss Re excess rainfall product

This paper explains the excess rainfall parametric insurance product of the Caribbean Catastrophe Risk Insurance Facility (CCRIF) and Swiss Re Excess Rainfall (XSR), which helps to mitigate the short-term cash flow problems small developing economies suffer after major natural disasters. The product is aimed primarily at extreme high rainfall events of short duration (a few days).

The paper is organized into eleven sections: (i) section one introduces the mission and vision of the CCRIF; (ii) section two explains the basis for the excess rainfall product and the coordination with XSR; (iii) section three outlines the rationale for the excess rainfall product policy, citing that this policy fills gaps in the previous insurance policy for the Caribbean; (iv) section four explains the development process of the excess rainfall product system; (v) section five explains the model itself; (vi) section six explains the process of calculating index losses; (vii) section seven details member-country rainfall risk profiles; (viii) section eight explains the process of determining a country's excess rainfall policy; (ix) section nine explains the process of determining a country's premium cost; (x) section ten explains how payouts are calculated; (xi) section eleven explains the differences between the excess rainfall product and the CCRIF hurricane product.