The earthquake that struck Haiti will trigger the country's full $8 million earthquake cover with the Caribbean Catastrophe Risk Insurance Facility (CCRIF), according to the organisation.

Haiti bought both quake and windstorm cover from CCRIF, paying $385,000 for its earthquake cover. The payment will be made after the standard 14-day wait period enforced by the CCRIF.

The organisation said it was 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".

Little of the damage in Haiti, which appears to have claimed tens of thousands of lives, is directly insured, meaning the impact on insurers is likely to be limited. Haiti has a population approaching nine million, while the capital, which accounts for most of the insured property, has a population nearing two million.

California-based risk modeller Risk Management Solutions said that annual property and casualty (P&C) insurance premium in Haiti falls just short of $20m, making it one of the smallest insurance markets in the hemisphere. That figure amounts to just 0.29 percent of Haiti's 2008 GDP of $7 billion. Structures that were damaged or destroyed in Tuesday's 7.0 magnitude quake include the presidential palace, World Bank offices, the local United Nations headquarters, as well as several schools, hospitals and hotels.

"Haiti is the poorest country in the Western Hemisphere and poor countries tend to purchase very little property insurance coverage," said Dr. Robert Hartwig, president and economist for the Insurance Information Institute.

"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. 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 a litany of challenges including 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, said Mr. Hartwig. He added 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.

A December 2009 report by Axco Insurance Information Services on Haiti's non-life (property/casualty) market, said: "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."

In the absence of 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.