Vanuatu has effectively showcased the strength of its disaster risk management strategies through its timely 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 policy, was impressively processed in less than two weeks, demonstrating PCRIC’s swift disaster response capabilities.

During a ceremonial event in Port Vila, PCRIC’s CEO Aholotu Palu presented the cheque to Prime Minister Charlot Salwai Tabimasmas and Finance Minister Johnny Rasou Koanapo. While Palu noted that the payout cannot cover all the extensive damages caused by the earthquake, he emphasized its critical role as immediate financial assistance for governments during such challenging times.

The insurance policy was developed in close consultation with Vanuatu’s government representatives and took effect just 16 days prior to the earthquake, highlighting the foresight and strategic planning of the Vanuatu government in enhancing disaster preparedness. The policy allocates 80% of premiums to cyclone risks, with 10% each assigned to earthquake and tsunami coverage. A distinctive feature of this policy is its people-centered payout trigger, which bases payouts on the estimated number of individuals affected rather than focusing solely on damage to infrastructure.

Palu pointed out that the payout exceeds the government’s contribution to the earthquake component of the policy by over 73 times, showcasing an impressive return on investment and reflecting the Vanuatu government’s commitment to disaster risk management.

Based in the Cook Islands, PCRIC aims to bolster resilience among Pacific governments, equipping them with necessary tools to manage the financial impacts of natural disasters. Vanuatu’s experience serves as a hopeful indicator for other nations in the region, highlighting the significance of preparedness and timely financial support in the face of climate change-related threats.

In summary, Vanuatu’s swift receipt of the insurance payout represents a successful integration of strategic planning and disaster recovery efforts. This situation fosters optimism for future preparedness initiatives across the Pacific region and underscores the collaborative efforts necessary to build stronger, more resilient communities amidst an increasingly unpredictable climate.