PIFS and PCRIC Roll Out Partnership on Disaster Risk Finance
10 February 2022
PCRIC’s Response to the Tongan Volcanic Eruption and Tsunami
21 February 2022
An extraordinary online meeting of the Council of Members of the Cook Islands-based Pacific Catastrophic Risk Insurance Foundation (PCRIF) was convened by Mr. Shiri Gounder (Permanent Secretary, Fiji Ministry of Economy). The meeting aimed to facilitate crucial discussions on the path forward following the recent volcanic eruption and tsunami in Tonga.
The significance of the meeting was underscored by the presence of representatives from member nations, donors, and other key stakeholders from around the world, highlighting a renewed emphasis on Disaster Risk Financing tailored to the specific needs of the Pacific Islands region.
In his opening remarks, Mr. Gounder noted that the tragic events in Tonga continue to cast a shadow across the region. He emphasized that the special meeting served as a timely reminder of the substantial human and financial costs that countries in the region face annually. “We applaud the due diligence applied by Tonga in this regard, and encourage all governments across the region to implement appropriate risk management strategies and utilize the services available from Disaster Risk Finance (DRF) organizations such as PCRIF’s related captive insurance company, the Pacific Catastrophic Risk Insurance Company (PCRIC),” he stated.
PCRIC, owned by Pacific Island nations and supported by generous donor nations including Japan, Germany, the United Kingdom, and the United States, along with the World Bank, specializes in disaster risk finance solutions. It offers governments a range of parametric insurance options, as well as technical advice and support for capacity building.
The meeting dedicated significant time to discussing lessons learned from the events in Tonga. Many member nation representatives expressed a strong desire for increased levels of technical support and capacity building, emphasizing that this would enhance understanding of risk extent and impact, thereby informing critical governmental and administrative decisions regarding DRF planning, management, and insurance coverage.
Mr. Aholotu Palu, CEO of PCRIC, reiterated the company’s commitment to addressing these needs. He highlighted the recently signed Memorandum of Understanding (MOU) with the Pacific Islands Forum Secretariat (PIFS), Centre for Disaster Protection (CDC), and Insuresilience Global Partnership (IGP) as a step toward establishing a collaborative framework for common interests, including DRF capacity building.
Another key topic discussed was the desire of Pacific island nations to receive support in adopting Disaster Risk Financing instruments through some form of premium financing. Such assistance could mitigate the significant budgetary impacts that careful DRF planning imposes on already struggling economies, especially considering the prolonged effects of the COVID-19 pandemic. It was noted that Germany had recently committed a generous €10 million to partially assist member nations in this area.
A further highlight from the meeting was the announcement from Mr. Palu that PCRIC has been restructured into a segregated portfolio entity. A review of products and consideration of additional financing instruments, such as a contingent savings fund, are currently underway. “We are bringing on additional resources to better serve the nations of the Pacific and look forward to the continued support of our donors to help us become the organization that the Pacific Island nations need us to be,” Mr. Palu shared.
For more information, please contact:
ceo@pcric.org or aholotupalu@yahoo.co.uk
