PCRIC Speaks at Sustainable Financing Conference
For the first time, the Pacific Catastrophe Risk Insurance Company (PCRIC) was invited to attend and participate in the second Sustainable Financing Indo-Pacific conference held in Bangkok, Thailand, from June 24th– 25th, 2024. The conference was co-organised by the Agence Française de Développement (AFD) and the Asian Development Bank (ADB).
PCRIC CEO, Mr. Aholotu Palu, represented the Company as a panelist, contributing to discussions on Disaster Risk Management (DRM) from a sustainable financing perspective. This event brought together key stakeholders from AFD and ADB management, public financial institutions, universities and development banks to discuss ways to increase resilience and co-create long-term solutions across the Indo-Pacific. More importantly, it aimed to understand the nexus of disaster risk financing and sustainable development in the region.
Addressing a session on DRM in the Indo-Pacific, Mr. Palu emphasised that the Pacific region is located in the ‘Ring of Fire’ and many countries are within the South Pacific tropical cyclone belt, making the region highly exposed and vulnerable to natural disasters. Access to finance to support resilience-building is a significant issue for the region, given the limited financial resources to address loss and damage caused by natural disasters exacerbated by climate change.
This protection gap underscores the need for institutions like PCRIC, which provides parametric insurance solutions to support governments in accessing immediate post-disaster funds, expediting relief efforts and infrastructure restoration. He also highlighted PCRIC’s role as a key DRM financial instrument that helps countries protect their national budgets when a disaster strikes despite constrained financial capacity.
Mr. Palu noted that climate change has increased the frequency and severity of disasters in the Pacific region, with countries experiencing climate-related events outside traditional periods of highest risk. For instance, he cited significant flooding in Samoa during what was typically a dry period last year, illustrating the need for comprehensive protection based on up-to-date risk modeling.
Reflecting on PCRIC’s experience, Mr. Palu explained that the insurance sector supports governments in managing disaster risks by reducing budgetary volatility through absorbing the financial impact of catastrophic incidents. Additionally, the technical expertise in risk modeling can enhance in-country capabilities beyond insurance, such as identifying engineering risk reduction measures. He highlighted PCRIC’s approach of designing financial protection solutions using pre-arranged mechanisms (ex-ante) agreed upon before disasters occur, enabling governments in the Pacific to receive funds within 10 days post-disaster to support relief and recovery efforts.
Mr. Palu concluded by stating PCRIC’s core role in developing solutions to build financial resilience, which must be combined with effective disaster risk reduction, disaster response planning, and efforts to build back better after disasters. When governments insure critical assets or sectors against natural disaster risks, they are more likely to invest in those sectors, promoting economic growth and enhancing communities and livelihoods.
He thanked the organisers for the opportunity given to PCRIC to be part of this esteemed conference and emphasised the importance of partnership and collaboration in DRM. He noted that working in silo is a recipe for disaster. Addressing climate change must be a collaborative effort involving all countries, institutions, and partners if we are to mitigate its devastating impacts.
