Nikhil DaVictoriaLobo, a Swiss Re Public Sector vice president, explained by e-mail that while the CCRIF policy limit for Haiti was relatively small, it demonstrates clearly how parametric insurance solutions enhance the ability of governments to deal quickly with the onslaught from catastrophes and reduce at least some of the associated human devastation.

Swiss Re as part of its Public Sector client focus, collaborates with the CCRIF to deploy country risk management practices in the Caribbean basin (including Haiti) as well as develop new parametric products for the region.

According to Mr. DaVictoriaLobo his company advocates pro-active, cohesive risk management plans for CCRIF that include a combination of prevention measures and risk transfer instruments and advance funding sources as a powerful antidote to alleviate the pain catastrophes.

CCRIF said in addition to providing parametric catastrophe coverage it has been assisting the Caribbean region to become disaster resilient by working with partner organizations such as the Caribbean Institute for Meteorology and Hydrology (CIMH) and the Caribbean Disaster and Emergency Management Agency (CDEMA) to provide data and other technical assistance for better planning for, response to, and recovery from natural catastrophes.

The pool noted that CIMH is currently running detailed weather forecast models over Haiti to identify areas prone to landslides from flash flooding in the areas that have been affected by the earthquake "and will facilitate proactive action."

CCRIF said it is "hopeful that the rapid payment of funds under Haiti's policy will assist the government and people of Haiti in addressing immediate needs as they begin the recovery and rebuilding process."

CCRIF is owned, operated and registered in the Caribbean for Caribbean governments. It is designed to limit the financial impact of catastrophic hurricanes and earthquakes to Caribbean governments by quickly providing short-term liquidity when a policy is triggered.

The pool describes itself as the world's first and, to date, only regional fund utilizing parametric insurance, giving Caribbean governments the unique opportunity to purchase earthquake and hurricane catastrophe coverage with lowest-possible pricing.

CCRIF said it "represents a paradigm shift in the way governments treat risk, with Caribbean governments leading the way in predisaster planning.

Sixteen governments are members of the fund. In 2007, CCRIF said it paid out almost $1 million to the Dominican and St Lucian governments after the Nov. 29, 2007 earthquake in the eastern Caribbean, and in 2008, CCRIF paid out $6.3 million to the Turks & Caicos Islands after Hurricane Ike made a direct hit on Grand Turk.

Insurance Information Institute noted that Haiti's private insurance market is very small.

"Haiti is the poorest country in the Western Hemisphere, and poor countries tend to purchase very little property insurance coverage," said I.I.I. President Robert P. Hartwig in a statement.

"The fact that there is very little information about Haiti's private insurance market suggests that the market is very small--likely not more than a few tens of millions of dollars," added Mr. Hartwig. "Consequently, private insurer losses from the 7.0 temblor on Tuesday, January 12, will be modest and will not have a material impact on global insurance and reinsurance markets."

Beyond earthquakes, Haiti's insurance markets face challenges from frequent hurricanes, severe floods, landslides and mudslides, poor public safety infrastructure, and the fact that the country has a history of political and civil unrest, Mr. Hartwig noted.

He mentioned that some multinational firms with facilities in Haiti may be insured for losses under blank policies that respond to losses wherever in the world they occur.

London-based Axco Insurance Information Services in a December 2009 report said concerning Haiti's property and casualty market: "Some 90 percent or more of Haiti's insured risks are situated in Port-au-Prince, but no information is available about aggregate sums insured."

Lacking official data, Axco estimated the total non-life premium income written in Haiti at $19 million in 2008, with the non-life category consisting primarily of p&c policies for auto, homeowners and commercial insurance.

The huge amount of fatalities and property damage in Haiti is drawing comparisons to the May 2008 southwest China earthquake that killed 87,449 people, according to Swiss Re.

Like Haiti, China had little private insurance coverage to offset the severe economic damage the nation incurred. Swiss Re estimated that the Sichuan Province quake generated $366 million in insured losses, even though the overall economic damages to China as a whole were equal to $125 billion.

I.I.I. noted that earthquake damage in the U.S., other than fires, is not covered under standard homeowners or business insurance policies, but coverage is usually available for earthquake damage in the form of a supplemental policy.