PCRIC and Regional Risk Pools Host Joint Side Event at COP 29

The Pacific Catastrophe Risk Insurance Company (PCRIC), along with regional risk pools; the African Risk Capacity Ltd. (ARC), the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC), and the Southeast Asia Disaster Risk Insurance Facility (SEADRIF Insurance Company), once again co-hosted a joint side event at this year’s COP gathering in Baku, Azerbaijan.

The event, themed “Addressing Loss and Damage from Climate Change: The Role of Risk Pools,” provided a platform for the organisations to share experiences, discuss challenges, and explore collaborative solutions to enhance resilience against climate change impacts. PCRIC CEO Mr. Aholotu Palu highlighted three critical issues facing the Pacific region.

Firstly, he addressed the affordability of policies, noting that many Pacific nations struggle with the high cost of insurance premiums, which makes it difficult to access essential coverage against climate-induced disasters. Secondly, he pointed out the high transaction costs associated with educating stakeholders and issuing policies. These expenses add to the financial burden, hindering the widespread adoption of risk transfer solutions. Thirdly, he discussed the competition with the status quo, explaining that PCRIC faces challenges competing with established norms and existing insurance mechanisms, which can impede the implementation of innovative risk management strategies.

Mr. Palu emphasised the importance of PCRIC being well-embedded politically within Pacific countries to enable it to speak with confidence on the region’s unique needs, and to foster stronger partnerships. An example of this was when PCRIC became aware that fiscal constraints were a major barrier to some of the most vulnerable nations accessing insurance coverage, and that they were able to successfully advocate for support from donors for the establishment of a premium subsidy fund to assist in lowering the cost borne by countries.

This joint risk pools initiative underscores a shared commitment to addressing loss and damage from climate change through effective risk pooling and insurance solutions. By uniting efforts, the organisations aim to strengthen financial protection mechanisms, support sustainable development, and enhance the resilience of vulnerable communities in the face of escalating climate threats within their respective regions.