My name is Aholotu Palu, and I am from Tonga. It is my privilege to serve as CEO for the PCRIC which was established in 2016 following a mandate given by the Pacific Finance Ministers at their annual Forum Economic Ministers Meeting (FEMM) held in 2015.
It was natural for me to apply for the position of PCRIC CEO because I have a passion to help the region and I have personal knowledge of the challenges facing Pacific Island countries. Growing up in one of the most vulnerable countries in the world to natural disasters, I have firsthand experience seeing people suffering from disasters.
This experience influenced me to utilise my knowledge and skills gained while working at the World Bank, GIZ and the Pacific Islands Forum Secretariat for the benefit of the region. I intend to be a part of the solution and processes to help the region build resilience to natural disasters.
My Christian faith shaped how I grew up personally and professionally, which premised on the four Tongan cultural golden pillars, namely: Respect, Humility, Loyalty and Obligation.
Optimistic. But if I were allowed an additional word, it would be ‘Determined’.
First of all, becoming the CEO of a regional organisation is actually a dream opportunity for me. Working in Tonga’s Finance Ministry, as well as in the Prime Minister’s Office, greatly helped equip me with the appropriate skills to navigate and work in a regional leadership role.
Being a regional organisation CEO expands on the skills I learned from holding a government position because you are hired to serve many countries and stakeholders and not to be served. This statement constantly reminds me that I am just a member of a team that runs the organisation. My accumulated experiences in my past capacity instilled the “We” and “Us” attitudes, and not the “I” and “Me” mentality.
Working in silo is the path to failure. When you recognise that you are there as part of a team, it helps you as a person to appreciate your surroundings even more. Remember, the word “TEAM” stands for Together Everyone Achieves More. This is a guiding principle for me in working with the PCRIC team and stakeholder countries to raise the level of service to the Pacific region.
Personally, in a natural disaster, you first face death or physical injury. At the same time, you face losing your home, all your possessions as well as livelihood, and then you find yourself in a precarious living state. Such situations in some countries potentially leads to civil unrest.
Countries need to seriously consider diversifying their financing options to be able to meet the immediate financial needs after a natural disaster. PCRIC isn’t a panacea to disasters, but its offerings help to save lives by supporting governments with immediate relief effort post-disasters.
Governments can fulfil one of its fundamental purposes – by protecting their citizens, particularly the vulnerable population. We know for a fact that governments cannot act quickly without financial resources. PCRIC is a key enabler of rapid and effective response.
The World Bank is an excellent educational institution and strengthened my interest in making significant national impacts at a global level. It does this by first taking in a theory and turning it into practical applications.
PIFS is also an excellent political regional institution that has huge convening power to effectively coordinate regional development matters that will bring change to the region.
I gained considerable policy and technical knowledge and understanding from both institutions which greatly helps me perform my current leadership role with PCRIC. This background includes helping me to observe and consider each national context before seeking to support policy development or alternatively disaggregating high-level regional policy into an absorbable capacity for implementation at the national level.
My vision is to grow PCRIC to meet the needs of the region in terms of membership and products that are available to Pacific Island countries. This must be accompanied by a capacity building program to ensure that it helps change the mentality toward preparatory action to improve national responses to natural disasters.
I hope what PCRIC is planning to execute in the coming months, as articulated in the Strategic Plan 2021-2025 and the Business Plan 2021-2022, will empower governments and their people to understand the value of sharing the financing of risks pooled together across all vulnerable countries and to design inclusive response plans.
There is a lot of work ahead for PCRIC which needs all the support from key stakeholders, not only in securing premium finance to support Pacific members, but to be able to offer something back to the island countries with and without insurance payouts, since we do not “wish” for countries to have frequent natural disasters.
We do want countries to be better prepared in terms of planning, knowledge and access to finance to build resilience and to sustain the important development gains they have made over the years.
People with a commitment to serve the region. People with the “We” mentality but not the “Me” attitude. But of course, service must be accompanied by relevant qualifications and technical capabilities.
I expect that the advantages or challenges I am currently facing in terms of managing PCRIC from Fiji will remain even after we stop managing the company remotely due to COVID-19.
I’m used to having the team working alongside with me. Unfortunately, the current business model is limiting our physical interaction. COVID-19 makes it more challenging, but I know it is temporary.
There are quite a few, but I will just share the main ones.
First, securing the extension of the PCRAFI project for another 1.5 years from the World Bank as it was supposed to expire on 30th June.
Second, the approval of the 2021-2025 Strategic Plan by the Council of Members and the Board effective 1st July. The Business Plan July 2021-June 2023 was also approved by the Board and the World Bank.
Third, is the admission of PCRIC, as an observer, to the FEMM annual conference. This is an enormous accomplishment as it was envisaged from day one to integrate PCRIC into the regional coordination architecture.
Fourth, the launching of a large internship program with the University of the South Pacific with more than 20 students from different academic disciplines. They were all interested in learning how to support disaster risk finance and management programs to strengthen the region.
Fifth, is PCRIC becoming a member of the InsuResilience Global Partnership which helped boost PCRIC’s global visibility and access to exchange experience, expertise and services, and a contribution to shaping the future policy, practice and investment.
Sixth, secured €10m in premium financing from Germany via the World Bank.
The sub-region of the Pacific is highly diverse culturally, albeit it has some commonalities when it comes to the fundamentals of economic and social development such as smallness, remoteness from the market and narrow export bases.
Communication is challenging. Luckily, many of my contacts were officials that I have known in my prior capacity when I was with the government of Tonga, GIZ and with the Forum Secretariat, which has made things a little easier as they are always open to meetings to share or discuss DRFI.
My message to the country’s leadership via the officials is clear. PCRIC cannot address all your disaster response preparation and post-event needs. But it is THE company that can immediately provide fresh air to breath fiscally post disaster by giving them quick cash to support their relief efforts in saving lives and instantly putting people/businesses back on the right track again.
Human needs are the same across the region: food, shelter, sanitation, clean water, access to education, public services, and educational opportunities. PCRIC exists to help Pacific Island countries finance post disaster needs to protect vulnerable populations and to address common human needs. The specific needs of each country and its priorities can be tailored according to each country’s public policy priorities.
PCRIC’s current insurance products are intended to serve sovereign governments. While PCRIC’s products all have the same purpose of providing a rapid payout after a disaster event, countries are able to tailor policies in terms of the type and severity of risks covered in order to align with their post-disaster financing needs and objectives.
While the policies held by countries are therefore not all the same, all insured countries benefit from PCRIC’s ability to pool the risk and attract competitive reinsurance pricing for a portfolio of policies compared to the situation if countries were to try and secure insurance coverage in the international market themselves.
In addition to supporting sovereign governments, PCRIC is currently going through a transition to a new company structure which will provide the flexibility to offer insurance products to non-sovereign entities including providing support to the private sector.
We seek uniform commitment from those countries to participate, share lessons, pool funding and coordinate risk management with all stakeholders, while respecting a country’s individual sovereign policy preferences as much as possible.
There are five major challenges for me. Three are strategic and two operational.
First are the current disaster protection products (cyclone and earthquake/tsunami) we offer to the countries. Since these are relatively new insurance programs there can be a lack of technical understanding of the relationships between coverage, premiums and trigger points of these products. A key objective for PCRIC is to diversify our existing products and to add products that meet the various needs of countries in the region in a cost-effective way. PCRIC is working hard to develop a rainfall product (covering drought and flooding) to be rolled out in 2022. Consultation about the rainfall product has been conducted with more than 10 countries in the region. Demand is unanimous. We are going to reorganise PCRIC into a segregated-cell company to allow it to provide non-sovereign products and other disaster risk instruments, hopefully before the end of 2021.
A second challenge is capacity-building. It is a major challenge since there are turnovers of key officials within governments. This often leads to the loss of people that had a strong relationship with PCRIC and its programs. What I have learnt is that while the regional approach to capacity building is relevant, the best modality is to deliver country-specific training programs where knowledge is transferred to a larger pool and to the right people. The establishment of a multi-ministerial core group for DRF amongst all the relevant ministries will help the region retain knowledge and improve continuity.
Third is building ownership. After many years of regional consultations under the PCRAFI project, which PCRIC continues to do since its establishment, I have the sense that there remains a lack of technical understanding about the complexity of parametric catastrophe insurance vs the conventional indemnity options which has contributed to low “buy-in” across the region. I have taken this issue to heart and have started working to develop a TA program that directly addresses the technical gaps so countries can better understand the value-for-money offering relating to paying premium for PCRIC insurance programs. We have issued the first “knowledge product” publication for PCRIC which has helped with our engagement with both participating and potentially participating countries. This is an ongoing activity to ensure Pacific Island countries are well informed with the latest development and more importantly strengthen advocacy.
A fourth challenge is the current operational model in which PCRIC still relies quite heavily on external consultants to support the technical and operational functionalities of the company. The operational arrangement with the existing human resources is working on a time basis which is in line with the effort to keep costs as low as possible so as to pass on those savings to Pacific Island countries participating in the insurance programs. This is a new operating model for me as I have been accustomed to working with staff on full-time employment. However, since this is PCRIC’s operating model for at least the next two years, I have adapted quickly to manage the company effectively and efficiently using the existing technical resources. Learning to do more with less and building the structure to be fit for purpose without overspending key resources and to evolve the model to allow growth and career opportunities for regional talent.
The fifth challenge is COVID-19 because it significantly impacts my ability as CEO to meet with the PICs’ leadership physically. As PCRIC must expand its activities, especially due to the financial impacts of COVID-19 on country public services and disaster preparations, we must move forward. I have learned that I must rely on virtual platforms such as Zoom, Teams, Skype etc. to connect with the countries and build relationships, particularly with the officials. This is what I have been doing these past 11 months, communicating with and updating countries with the latest programs and services of PCRIC and, more importantly, to remind them that PCRIC will support their DRF priorities.
Overall, these challenges are mitigatable, and I am working closely with the team and the Board to address them.
With the current business model that we are operating in, it is important that you are patient. Patience is a virtue.
We want more young people to become interested and involved with PCRIC learning and capacity-building programs. They will help the region develop solutions for its economic and social development priorities for the future.