Hurricane Irene caused nearly $37 million in government losses in The Bahamas, a regional insurance body has estimated.
But the country will not receive any payout from the Caribbean Catastrophe Risk Insurance Facility (CCRIF) as the damage is not considered significant enough for The Bahamas to qualify, according to Simon Young, CEO of Caribbean Risk Managers, the facility supervisor of CCRIF.
The CCRIF, which is a non-profit risk pooling facility owned and   operated by Caribbean governments, said its board and team share the belief of the Bahamian government that the impact of Hurricane Irene was not as bad as had been feared.
Prime Minister Hubert Ingraham declared last week that the country was not devastated by the storm.
"Early damage reports indicate low to moderate impacts except for some southern and eastern islands in The Bahamas, which lay directly on Irene's path," said a statement from CCRIF.
"Critical tourism infrastructure, on which these countries largely depend for economic activity, was not badly affected. The Bahamas Ministry of Tourism indicated that the major tourism areas of Nassau/Paradise Island and Grand Bahama have seen a quick return to normal operations."
Speaking from his office in Jamaica yesterday, Young explained to The Nassau Guardian that CCRIF policies feed off of the loss estimates that it makes within a catastrophe loss model.
"The computer models use wind speeds, storm surges and waves across The Bahamas through the whole of the storm then it calculates what the estimated loss would be for the economy of The Bahamas with particular focus on things that the government will have to pay for. Then it comes up with a national loss number for The Bahamas as a whole.
"So what happens, because The Bahamas covers such a large geographical area, what we saw with Irene was a relatively high level of damage on the Family Islands. But because their value in terms of the national economy is not very large then that doesn't turn out to be a big loss proportionate to the whole Bahamas."
He explained that because the Bahamian government has a policy for the entire country, losses need to be significantly higher.  "The hurricane needs to affect areas with more contribution to the economy than just the Family Islands, which is what Irene impacted," Young said.
CCRIF estimated the government losses to be somewhere around $36.8 million, Young said.
Asked what amount of damage would be needed to trigger the policy, Young said the information was classified. However, he said the $36.8 million is "quite far from the trigger level."
Young said with New Providence and Grand Bahama being the major economic hubs in the country, it's unlikely that the country's policy would be triggered unless those islands are severely impacted.
"It would be very difficult to get enough losses in the Family Islands to trigger the policy," he said, adding that even if the Family Islands were wiped out some damage may still be required on New Providence or Grand Bahama.
Most of the damage in the Family Islands was done to private homes and buildings.
Young explained that the policy is not designed to cover private structures.
He added that CCRIF will discuss with the Bahamian government whether an additional policy is needed specifically to cover the outer islands.
In the meantime, he said CCRIF has already contacted the government to see what other ways it may be able to assist, for example through CCRIF's technical assistance program.
The Bahamas was one of six member states in the region impacted by the storm.  Anguilla, Antigua and Barbuda, Haiti, St. Kitts and Nevis and the Turks and Caicos Islands (TCI) will also not benefit from the policy.  The CCRIF noted that of these territories, the highest losses were determined for The Bahamas and TCI.
None of the other four territories was "impacted by more than lower tropical storm force winds (under 50 mph)."
CCRIF reported that it contacted the governments of TCI and The Bahamas to advise them that their policies were not triggered.
"Turks and Caicos' financial secretary confirmed that the damage was not as significant as was expected and indicated that the damage was primarily associated with flooding," the CCRIF statement said.
Since CCRIF's inception in 2007, the facility has made eight payouts totaling just under US $33 million to seven member governments.

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