PCRIC Under the COP26 Spotlight
15 November 2021
PACNEWS – Second Edition, Monday 22nd November 2021
22 November 2021
From October 28th to 29th, 2021, the Pacific Catastrophe Risk Insurance Company (PCRIC) participated in the Annual Forum hosted by the InsuResilience Global Partnership (IGP). This forum serves as a platform for members to highlight accomplishments, reflect on challenges, and inspire action for the upcoming year.
During the forum, PCRIC’s CEO, ‘Aholotu Palu, was a panellist in two significant sessions: “Risk Pools in Focus” and “Moving the Needle on Premium and Capital Support.” These discussions aimed to identify what is necessary to strengthen the global risk financing architecture, thereby promoting higher adaptation levels and greater resilience.
The “Risk Pool” session provided a specially organized platform for leaders of influential sovereign risk pools worldwide. Panellists reflected on both successes and challenges, with particular emphasis on lessons learned from the COVID-19 pandemic in their respective regions.
Mr. Palu outlined PCRIC’s unique history and current initiatives, emphasizing support for Pacific Island Countries’ disaster risk financing insurance priorities through a ‘scalable solution’ approach, focusing on three key areas:
- Scaling Up – PCRIC’s role as a policy influencer in the Pacific region
- Scaling Out – Applying persuasive messaging across all sectors of the economy
- Scaling Deep – Acting as a catalyst to shift mindsets from reactive to proactive strategies
PCRIC’s strategic ‘Scaling’ agenda aligns closely with one of the Forum’s objectives: to raise ambition and set standards for the successful implementation of Climate and Disaster Risk Finance and Insurance solutions, particularly for vulnerable populations.
Mr. Palu further addressed the significant challenge Pacific countries face in affording insurance products, particularly new and untested offerings designed to protect against disasters. He noted, “Severe disasters are very frequent, and there is consistently a need for meaningful payouts to support post-disaster relief and recovery in our region. The frequency and severity of natural disasters are further exacerbated by climate change.”
One potential strategy for alleviating financial burdens for Pacific nations involves the use of Risk Pools, which are already established in other disaster risk financing frameworks. This risk-sharing mechanism enables more proactive disaster risk management, streamlining donor support while allowing countries greater autonomy in effectively utilizing post-disaster funds.
Mr. Palu explained, “Risk pools mobilize resources to provide parametric insurance coverage with speedy payouts. The goal is to encourage long-term development gains.” He added, “This theory of change aims to enhance preparedness and proactive response, saving lives and livelihoods while optimizing donor support.”
PCRIC is collaborating closely with IGP to incorporate smart premiums into its overall strategy, specifically within its premium finance approach. Smart premiums represent a one-off payment investment-linked insurance program that guarantees capital.
Despite this, premiums will still need to be paid. Mr. Palu noted that donor support is crucial in promoting greater sovereign accountability and self-reliance. “We need to understand donor perspectives and align our products with their goals. This alignment is key to securing donor support for both premiums and broader programs like PCRIC,” he stated.
He also mentioned that premium finance could serve as a testing ground to build confidence among countries that these insurance programs can be effective.
PCRIC is a dedicated regional provider of specialist disaster risk finance services, owned by the island nations of the Pacific. The organization offers technical assistance, specialized collaborations, and innovative products to help the Blue Pacific Continent prepare, structure, and manage finances for enhanced disaster resilience. Ultimately, this ensures rapid access to unencumbered liquid funds during post-disaster situations when nations need support most.
For more information, please contact:
ceo@pcric.org or aholotupalu@yahoo.co.uk
