Disaster Insurance on the Agenda in the Pacific
March 24, 2014
NUKU’ALOFA, Tonga, March 24, 2014 --- Representatives of Cook Islands, Fiji, Samoa, Tonga, and Vanuatu attended a regional workshop last week on 20-21 March in Tonga to discuss the future of Disaster Risk Financing and Insurance (DRFI) in the region. The workshop was opened by Tonga’s Minister of Finance, Hon. Dr. ‘Asiake Valu Eke and closed by Tonga’s Deputy Prime Minister, Hon. Samiu Vaipulu and His Excellency the Ambassador of Japan to Tonga.
Participants acknowledged the great progress made in consolidating the Pacific DRFI program to date, as 4 participating countries (Cook Islands, Samoa, Tonga, and Vanuatu) discussed their experiences in using new financial tools that have been developed to improve post disaster financial response.
Tonga specifically shared its experiences in accessing post-disaster budget support under the innovative Pacific Catastrophe Risk Insurance Pilot. Earlier this year the country became the first to benefit from a payout under the regional pilot following Tropical Cyclone Ian, which swept across the Ha’apai island group on January 11th and 12th 2014, triggering a rapid payment of US $1.27 million to support recovery.
“Our government received the US$1.27 million payment from the Pacific Catastrophe Risk Insurance Program only two weeks after the cyclone hit,” said ‘Samiu Vaipulu, Tonga’s Deputy Prime Minister. “This injection of liquidity played a key role in ensuring that the government could respond swiftly to the most pressing needs of those affected by the cyclone”.
6 Pacific island countries – Tonga, Cook Islands, Marshall Islands, Samoa, Solomon Islands and Vanuatu – are currently participating in the Pacific Catastrophe Risk Insurance Pilot. Launched in January 2013, the pilot tests a risk transfer arrangement modeled on an insurance plan, and uses ‘parametric triggers’, such as cyclone intensity or earthquake magnitude to determine payouts, which allows for quick disbursements (usually within 3 weeks of a disaster occurring).
“Tonga’s experience demonstrates the important role that the private sector can play through the provision of catastrophe risk insurance, to rapidly provide an injection of cash in the immediate aftermath of a disaster," said Franz Drees-Gross, Country Director for the Pacific Islands at the World Bank. "This is one tool that can be used to help countries prepare for the impact of natural disasters, which as we well know are all too frequent occurrences in the Pacific region.”
He added, “This workshop provided Pacific Island Countries with a critical opportunity to have dedicated discussions on the future of the Pacific Disaster Risk Financing Initiative and guide its future direction in the region, including how it might be continued and expanded over the years ahead."
The workshop was designed to facilitate peer exchange and provide technical guidance for the future of the Pacific Disaster Risk Financing and Insurance (DRFI) pilot program which is scheduled to be discussed at this year’s Forum Economic Ministers’ Meeting (FEMM). The workshop was co-convened by SPC/SOPAC and the World Bank. PCRAFI is co-financed by the Government of Japan, the Global Facility for Disaster Reduction and Recovery (GFDRR), and the ACP/EU Natural Disaster Risk Reduction Program.
- Joint Vietnam-World Bank Group Study Will Seek Path for Higher Economic Growth
- World Bank Group ready to provide financial support worth $15-18 billion over the next three years
- World Bank Group President Jim Yong Kim to visit India
- Indonesia Economic Quarterly, July 2014: Hard Choices
- India: Skilled Jobs Help Rural Youth Fulfil Long-cherished Dreams