Vanuatu’s proactive approach to disaster risk management has been highlighted through its recent subscription to the Pacific Catastrophe Risk Insurance Company (PCRIC). Following the earthquake that struck Port Vila on December 17, the government received a parametric sovereign insurance payout of $1.2 million (approximately FJ$2.79 million). This payout, which constitutes the maximum amount allowable under the terms of the policy, was processed and disbursed in less than two weeks, reflecting PCRIC’s efficiency in response to natural disasters.
During a ceremonial event in Port Vila, Aholotu Palu, CEO of PCRIC, handed over the check to Prime Minister Charlot Salwai Tabimasmas and Finance Minister Johnny Rasou Koanapo. While Palu acknowledged that the payout would not cover the extensive damages caused by the earthquake, he emphasized its critical role in providing immediate financial assistance to governments in the aftermath of such disasters.
The specialized disaster risk insurance policy, which became effective just 16 days before the earthquake, was developed in close consultation with Vanuatu’s government officials. The policy allocates 80% of premiums to cyclone risks, with 10% each dedicated to earthquake and tsunami coverage. Notably, the payout mechanism is people-centered, focusing on the estimated number of individuals affected by the disaster rather than solely assessing damage to public assets.
Palu pointed out that the payout exceeds Vanuatu’s contribution to the earthquake coverage portion of the policy by more than 73 times, showcasing a remarkable return on investment. This outcome reflects the government’s commitment to enhancing disaster preparedness, particularly in a region frequently impacted by natural calamities.
PCRIC, based in the Cook Islands, is instrumental in strengthening the financial resilience of Pacific governments against climate change-related disasters. Vanuatu’s experience provides a hopeful example for other nations in the region, underlining the importance of strategic planning and timely support in effective disaster management.
In summary, Vanuatu’s swift receipt of the insurance payout not only symbolizes effective disaster management strategies but also instills optimism for future recovery efforts across the Pacific. This recent event highlights the essential role of preparedness and collaboration in building stronger, more resilient communities as Pacific nations continue to navigate the challenges posed by climate change and natural disasters.
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