CDMP Progress Bulletin

Estimate of the Probable Maximum Loss from Tropical Storm Events

Bulletin Date: January 2000

Since its inception, the USAID funded Caribbean Disaster Mitigation Project (CDMP) has worked with the property insurance industry in the Caribbean to promote loss reduction incentives and hazard mitigation. The lack of availability of reinsurance funds within the region has hindered progress in this activity. The World Bank and the Organization of American States (through the CDMP), have assisted the CARICOM Working Party on Insurance and Reinsurance in preparing a strategic plan for disaster loss reduction and improving risk management in the Caribbean, including the feasibility of establishing a regional reinsurance fund. Critical to determining the viability of such a fund is an understanding of the potential loss associated with a major natural hazard event in the region. To support this effort, the OAS and the World Bank carried out a study to estimate the probable maximum losses in public infrastructure from a major hurricane event in Dominica, Saint Kitts and Nevis and Saint Lucia.

For this study, the USAID/OAS-CDMP engaged an expert in the field of loss estimation. This expert was assisted by local engineers in each of the four target countries in the collection and analysis of the necessary field information. Included in the selection of lifeline infrastructure elements are: electrical power generation facilities, airports, seaports, road networks, water and sanitation facilities, waste management sites, schools and hospitals.

The study produced a comprehensive inventory of all facilities and structures; estimated replacement values; summary of potential retrofitting, protection, or reconstruction needs; and estimated loss potential associated with a maximum likely hurricane event. The resulting information can be used by the countries and the World Bank as a basis for preparing proposals for retrofitting/reconstruction investment projects.

Document Links

• A Probable Maximum Loss Study of Critical Infrastructure in Three Caribbean Island States (HTML 660k total)
• Insurance, Reinsurance and Catastrophe Protection in the Caribbean. May 1996 (HTML 186k).