Pacific Catastrophe Risk Insurance Company (PCRIC) will launch an early-trigger drought protection product to Pacific countries.
The company’s CEO Aholotu Palu announced the plans at the COP27 summit currently taking place in Egypt.
PCRIC is a regionally focused captive insurance company owned by Pacific Island nations through the Pacific Catastrophe Risk Insurance Foundation (PCRIF), based in the Cook Islands.
As a captive insurance company, the company’s focus is directed entirely toward the disaster risk insurance requirements of Foundation member countries.
PCRIC products are designed to meet specific needs identified by Pacific Island nations, and in times of crisis aim to deliver timely post-disaster liquidity to support rapid relief.
Palu announced the plans during a panel discussion at COP27 which was focussed on the theme: ‘Disaster risk finance for extreme weather in Small Island Developing States: linking anticipatory action, rapid response and debt restructuring.’
The panellists discussed innovative solutions in disaster risk finance where small island developing states are leading the way, while simultaneously helping to establish deeper collaboration between governments, international humanitarian organizations and risk financing entities.
Drawing on his recent trip to Tonga, Palu gave the example of how the dialogue with stakeholders there regarding a parametric drought insurance product under consideration also called for the introduction of early payout triggers.
He said, “As a result of consultations in Tonga supported by the global risk advisory group, Willis Towers Watson (WTW), our technical team are currently working to include an early trigger for our drought product and to validate the data that has been used for the model.
“Early triggers are aligned to anticipatory action which is needed for quick financing support mainly directed towards risk prevention and preparedness when a disaster strikes to avoid loss and damage. We endeavour to design our products to support Pacific countries in being proactive against disaster risks and avoid further adding to the enormous burden imposed in the advent of a national crisis.”
Parametric insurance is increasingly being developed in response to the rising number of natural disasters. Earlier this year, Aura Underwriting, a specialist Caribbean catastrophe managing general agent of Rokstone Group, has launched a Caribbean parametric product to complement its existing Lloyd’s Caribbean binder.