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Pacific Catastrophe Risk Insurance Pilot Launched

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Pilot program to help governments respond to natural disasters

The Marshall Islands, Samoa, Solomon Islands, Tonga and Vanuatu are all part of a pilot catastrophe risk insurance programme launched on January 17, 2013 to provide their governments with immediate funding if a major (natural) disaster occurs.

Japan, the World Bank and the Secretariat of the Pacific Community (SPC) have teamed up with the 5 Pacific Island Countries to launch the Pacific Catastrophe Risk Insurance Pilot. It will test whether a risk transfer arrangement modelled on an insurance plan can help Pacific island nations deal with the immediate financial effects of disasters.

The pilot relies on state-of-the-art financial risk modelling techniques and is the first ever Pacific scheme to use parametric triggers, linking immediate post-disaster insurance payouts to specific hazard events.  This joint effort will allow Pacific island nations to access earthquake and tropical cyclone catastrophe coverage from reinsurance companies at an attractive price.
The World Bank will act as an intermediary between the pilot countries and a group of insurance companies selected through a competitive bidding process – Sompo Japan Insurance, Mitsui Sumitomo Insurance, Tokio Marine & Nichido Fire Insurance and Swiss Re. The underlying risk modelling for the transaction is being provided by AIR Worldwide.

The Pacific Catastrophe Risk Insurance Pilot is part of the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI), a joint initiative of the World Bank, SPC, and the Asian Development Bank with financial support from the Government of Japan, the Global Facility for Disaster Reduction and Recovery (GFDRR) and the European Union.  

PCRAFI was launched in 2007 and aims to provide Pacific Island Countries with disaster risk assessment and financing tools to enhance their broader disaster risk management and climate change adaptation agenda.

FURTHER INFORMATION:
http://pcrafi.sopac.org

Last Updated on Wednesday, 06 February 2013 11:31  

Newsflash

In response to the recent negative press, particularly from the media outside of the Pacific islands, regarding the vulnerability of our islands to climate change and sea-level rise, the Director of the SOPAC Secretariat, Dr. Russell Howorth, convened a press conference to correct this misconception.

Specifically, these media (and others) have made reference to a recently published article in an international scientific journal co-authored by a senior staff member of the SOPAC Secretariat. Copies of the brief prepared by the senior staff member by way of a response were circulated. The response emphasises that the article addresses the ongoing change in shape, size, and position on the reef platform of 27 low-lying coral islands on four atolls over the past 19-61 years based upon studies of historic air photographs and recent high-resolution satellite imagery. In no way does it make sweeping conclusions that the vulnerability of our islands is reducing particularly with regard to predictions about future impacts of sea-level change.