The Pacific Catastrophe Risk Insurance Company (PCRIC) has announced the renewal of its insurance policy portfolio for governments and affiliated entities across Pacific Island nations, in partnership with WTW, a prominent global advisory and broking firm. This renewal aims to enhance access to disaster risk insurance coverage in the region, reflecting a strategic and improved approach to managing climate-related risks.
Under the guidance of PCRIC CEO Aholotu Palu, the updated policy designs, developed with input from WTW’s Disaster Risk Finance and Alternative Risk Transfer teams, are expected to significantly bolster insurance offerings in the Pacific. Palu emphasized the importance of PCRIC’s role in filling a crucial gap in the market, enabling governments and state-owned enterprises to obtain insurance solutions that are otherwise unavailable.
As climate change exacerbates the frequency and severity of natural disasters, PCRIC’s updated insurance tools are projected to provide much-needed protection for individuals, government infrastructure, and vital services, including coral reefs. WTW’s senior director of Disaster Risk Finance, Simon Young, highlighted that the new protocols are more focused on the needs of the local population and are tailored to the realities on the ground.
The introduction of simplified parametric insurance structures promises greater clarity in analytics, fostering increased confidence in climate impact models and ultimately resulting in more affordable reinsurance options. As a result, more markets are participating, which will contribute to governments being able to manage disaster risks more efficiently.
For the upcoming years 2024 and 2025, PCRIC is set to offer insurance against risks from tropical cyclones, heavy rainfall, earthquakes, and tsunamis to six Pacific governments: the Cook Islands, Fiji, Niue, Tonga, Samoa, and Vanuatu. Additionally, state-owned telecommunications entity PNG DataCo in Papua New Guinea and the Vatuvara Foundation in Fiji will also benefit from this insurance coverage.
This development illustrates a proactive approach to disaster risk management in the Pacific Islands, highlighting the collaboration between local governments and international organizations to build resilience against climate-induced challenges. As communities face increasing climate threats, such partnerships and innovations in insurance are vital to safeguarding not only economic assets but also the well-being of the populations served.
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