Recently, the Pacific Catastrophe Risk Insurance Company (PCRIC) International Legal Advisor – Secretariat, Dr. Timothy Nielander, presented at the International Bar Association (IBA) annual conference in Miami with around 5,000 lawyers in attendance from across Africa and the world attending with over 200+ working sessions.
This year, the IBA meetings featured sustainability focus sessions discussing different aspects of Environmental, Social, and Governance (ESG) and sustainability across the different legal systems.
With the theme, ‘Sustainability focus catastrophes, climate change and insurance industry implications’, Dr. Nielander’s presentation focused on sovereign risk pools and the important development objectives served by them.
PCRIC presented alongside the Caribbean Catastrophe Risk Insurance Facility and the African Risk Capacity insurance facility (ARC Ltd) (sister sovereign risk pool organisations) sharing insights with the international audience about how parametric insurance risk pools are structured and funded, while leveraging international reinsurance markets.
In recent years, the world has witnessed a record number of severe hurricanes and cyclones, firestorms, and other catastrophic events tied to climate change. This was presented as a major issue that international insurance markets and professionals must address based on the implications of climate change and increasing catastrophes.
Dr. Nielander further provided an overview on the level of country participation and payouts in the Pacific region, and the critical role that PCRIC plays as a development insurance organization intended to serve the public interest in helping island nations deal with climate change and to build resiliency.
He contrasted the value of insurance leveraged in international reinsurance markets versus the option of post-disaster loans provided by multilateral development banks which can add further compounding debt loads to already resource-challenged nations. In particular, disaster risk finance instruments can be complementary and should be layered in the most cost-effective ways to benefit countries.
Concluding his presentation, he also described the important role played by sovereign risk pools in helping to close the protection gap and to address climate risks across various vulnerable regions.
PCRIC CEO, Mr. Aholotu Palu commented that, “sovereign risk pools are critical tools that can help countries work together to improve disaster risk planning and finance, to protect their vulnerable communities.”
He noted that cooperation between Pacific countries requires special legal coordination between the national members, which recognizes the multi-lateral nature of regional programs like PCRIC.
The CEO commended the Cook Islands which provided a special legislative charter providing PCRIC its legal status as special development insurer, serving the region.