PCRIC at a Glance
PCRIC: Empowered by the People of the Pacific
PCRIC exists in large part because of the forward thinking and decisions of Ministers and others who attended the 2015 FEMM (FORUM ECONOMIC MINISTERS MEETING). The World Bank, together with generous donors have followed through to provide Pacific Islands Countries (PICs) with one of the most relevant and beneficial facilities available to assist them in managing the financial costs associated with the many natural disasters the region faces.
PCRIC works to enhance the financial resilience of PICs against natural disasters by improving their capacity to meet post-disaster funding needs. It does this by providing bespoke insurance products designed to address the need for timely access to liquid funds in the immediate aftermath of a natural disaster.
When a claim is triggered, PCRIC works with PIC governments to enable rapid access to a predetermined amount of funds which can help meet the costs of immediate relief and recovery expenditures. By providing rapid liquidity to affected PICs, PCRIC helps countries respond quickly and sustain hard-won development gains.
PCRIC serves the needs of Pacific Islands nations by leveraging three unique, competitive advantages:
- Regional Integration: As a Pacific Islands institution that merges risks, finances and additional resources over a wide multi-national region, we offer never before available disaster risk financing and insurance products.
- Technical Capability: We operate effectively and efficiently to leverage regional open risk information and underwriting platforms to educate at all levels and to produce customised solutions for each of our member nations.
- Global Partnering: We fully leverage the global Climate Risk Insurance landscape to the benefit of Pacific Island countries and peoples with respects to product development, offers and even donor alliances.
PCRIC provides ‘parametric’ insurance, which disburses payouts based on the estimated losses associated with tropical cyclones, earthquakes or tsunamis as calculated by a catastrophe model. The calculated loss is known as the ‘modelled loss’ and forms the basis of whether or not a payout is due. As the policies are based on the outcome of a pre-agreed model, there is no need to wait for an on-the-ground assessment of actual losses incurred, meaning payouts can be made very quickly after a covered catastrophic event.
PCRIC currently offers parametric insurance policies for tropical cyclone risk and for earthquake risk including tsunami. Member countries may choose one or both policies, with payouts being made within 10 days of an eligible disaster event occurring.
Additionally, PCRIC provides technical assistance covering the public financial management of natural disasters. This can include:
- The development of a national disaster risk financing strategy that recognizes the need for ex ante and ex post financial tools;
- Post-disaster budget execution to ensure that funds can be accessed and disbursed easily in the event of a disaster; and
- The insurance of key public assets to contribute to post-disaster reconstruction financing.
We Hear You
PCRIC is currently developing parametric insurance for excess rainfall events (which may not be due to tropical cyclones) and also droughts. These products will be made available to countries in 2021.
In addition, PCRIC is currently going through a restructuring process to become a Segregated Cell Company. This means that the Company will soon be able to offer PICs a greater range of financial products beyond just parametric insurance.
Don’t just take our word for it, listen to what others have had to say.
“The insurance payout from PCRIC has substantially improved our financial capacity to respond swiftly to the most pressing needs of those affected by the cyclone.”
– Honourable Pohiva Tu’ionetoa, former Minister of Finance – Tonga
“This evolution of PCRAFI/PCRIC is a major advancement in the region to mitigate against the financial impacts caused by extreme climate, weather related and geological hazards. Countries have full ownership of the PCRAFI/PCRIC Facility, putting finance ministers in the driving seat for product development and for designing financial instruments that fit national disaster risk financing strategies.”
– Dame Meg Taylor, former Secretary-General of the Pacific Islands Forum