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Liberty Latin America, one of the largest communications and entertainment service providers in the region, is anticipating around an $81 million payout from its parametric windstorm insurance after hurricane Melissa activated its coverage in the Caribbean.
Communications specialist Liberty Latin America has operations and infrastructure across Puerto Rico, the Caribbean and other parts of Latin America.
Now, the next major storm to affect the region, hurricane Melissa, has similarly activated Liberty Latin America’s coverage, further demonstrating the value parametric insurance coverage is playing for the company as it operates in catastrophe exposed regions.
Today, Balan Nair, CEO of Liberty Latin America, highlighted that the parametric insurance his company has in place facilitates a more rapid repair and recovery.
The company reported, “We have had independent confirmation that our parametric insurance program for storm protection has been triggered and, as of today, we expect to receive third-party proceeds during Q4 which will be used to rebuild impacted components of our network and mitigate loss of revenue.”
The company further explained that hurricane Melissa primarily impacted its Jamaican operations, and to a much lesser extent certain other operations within Liberty Caribbean.
Liberty Latin America is anticipating a larger parametric recovery than it received after last year’s hurricane Beryl, with almost double the recovery expected.
For major hurricane Melissa, Liberty Latin America said it anticipates receiving $81 million in the fourth-quarter from these parametric arrangements, after the weather derivative-like structure was triggered by the storm.
As with last year’s hurricane, Melissa in 2025 is providing another good example of the benefits of parametric insurance, or other forms of risk transfer structured with responsive triggers.
The payout Liberty Latin America expects to receive will help it to repair its communications infrastructure and return services more quickly to its customers, without needing to wait for any lengthy indemnity claims assessment.
For a provider of communications and media services to households, assessing the damage property by property could take a significant amount of time, so a parametric source of coverage, that is purely contingent on a major event occurring and reaching pre-defined trigger points, is once again proving a shrewd purchase for this operator.
Liberty Latin America’s CFO Chris Noyes commented today, “The payout will be invaluable to our Jamaican recovery and should go a long way to mitigating the overall financial impact.”
Noyes further said that the payout from the “robust” parametric program will cover property damage, business interruption and other financial impacts due to hurricane Melissa.
The firm’s CEO further said, “The way the hurricane parametric insurance was designed, with concentric rings, was very thoughtful. In this case it triggered the west-side ring and it triggered one of the other layers of the concentric rings from Kingston as well.”
The CFO also stated, “As we look at the parametric, it’s highly analytical and studied over hundreds of years of storms, and we focus on where the value in our business resides, so that it is protected. So if it does go over an urban centre, you know that there is a recovery to help mitigate the damage on both BI and property.
“But it is always evolving. Each year you’ll continue to get smarter on trying to figure out the best ways to protect risk for our business. “
Liberty Latin America anticipates $81m parametric payout for hurricane Melissa was published by: www.Artemis.bm
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