PCRIC’s tsunami product was designed in 2024 in collaboration with the risk modelling firm Temblor and the global (re)insurance broker WTW, with financial and technical support from the World Bank Group.
PCRIC’s approach uses a single trigger based on the maximum estimated wave height of a tsunami as per any tsunami threat message issued by the Pacific Tsunami Warning Centre (PTWC). Since the trigger is based on warning messages, an actual tsunami does not need to materialize nor any damage to occur for a payout to be due.
PCRIC’s tsunami product provides a payout for any PTWC threat warning of 1m or greater for an earthquake source, or for any threat warning from a volcanic eruption source. The product was priced based on historical warnings issued by PTWC as well as probable scenarios using the stochastic EventSet developed by Temblor and used for PCRIC earthquake policies.
WTW serves as the calculation agent responsible for determining if a payout is due following the issuance of PTWC threat warnings.
The tsunami that impacted Tongatapu after the Hunga Tonga-Hunga Ha’apai eruption in January 2022
