This payout was triggered following the earthquake on October 9, through the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company based in the Cayman Islands. The company is a multi-country risk pool that provides parametric disaster insurance to Caribbean and Central American governments. Formed in 2007 as the world’s first regional fund utilizing parametric insurance, it was restructured into a Segregated Portfolio Company (SPC) in 2014 to isolate portfolio risks and expand its products globally.
Unlike traditional insurance that pays based on assessed damage, CCRIF’s parametric model triggers payouts automatically when a natural hazard meets predefined physical criteria (e.g., wind speed, earthquake magnitude, or rainfall levels). This unique mechanism provides governments with critical, rapid liquidity—guaranteed within 14 days—to secure immediate disaster relief. Panama Earthquake Payout: Following the earthquake that struck Panama, CCRIF activated its SPHERA seismic evaluation model. It officially announced a US $17.4 million payout to the Government of Panama to catalyze emergency infrastructure repairs and public response.
What is parametric disaster insurance? This type of insurance is paid out automatically when a natural disaster meets certain criteria established in the policy. Traditional insurance requires a damage assessment to determine the payout. Felipe Chapman, the Minister of Economy and Finance, confirmed that the funds are part of the compensation for the parametric insurance and do not represent any additional cost to the treasury.
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