Vanuatu’s timely subscription to the Pacific Catastrophe Risk Insurance Company (PCRIC) has resulted in a prompt disbursement of a parametric sovereign insurance payout totaling $1.2 million (approximately FJ$2.79 million) following the earthquake that struck Port Vila on December 17. This payout, which constitutes the maximum allowable under the policy, was delivered in less than two weeks, showcasing PCRIC’s rapid-response capabilities.

During a recent ceremony in Port Vila, PCRIC Chief Executive Aholotu Palu handed over the check to Prime Minister Charlot Salwai Tabimasmas and Finance Minister Johnny Rasou Koanapo. While acknowledging that the funds will not fully cover the extensive damages caused by the earthquake, Palu emphasized the crucial role of such payouts in providing immediate support to governments during crises.

The specialized disaster risk policy was developed in close collaboration with Vanuatu’s government representatives and took effect just 16 days before the earthquake, highlighting the foresight and proactive planning of the Vanuatu government in enhancing disaster preparedness. The policy allocates 80% of the premium to cyclone risk, with the remaining 20% split between earthquake and tsunami coverage. Notably, it employs a people-centered payout trigger, focusing on the estimated number of individuals affected rather than merely assessing damage to public assets.

Palu noted the impressive return on investment for Vanuatu, stating that the payout exceeds the government’s contribution to the earthquake coverage component by over 73 times. This outcome not only reflects effective planning but also underscores the government’s commitment to improving disaster preparedness in a region prone to natural calamities.

PCRIC, based in the Cook Islands, is dedicated to aiding Pacific governments in managing the financial impacts of natural disasters. Vanuatu’s experience exemplifies how strategic disaster risk management can facilitate timely recovery and foster community resilience against climate change-related challenges.

In summary, Vanuatu’s swift receipt of the insurance payout highlights the importance of preparedness and effective disaster management strategies. This experience offers a hopeful outlook for future disaster recovery efforts in the Pacific, underscoring the need for ongoing collaboration and proactive measures to strengthen resilience against natural disasters.