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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

“With a project as significant and exciting as this, we expect that there will be misunderstandings and misinformation, especially through those using the media. But we also know that it is important that any confusion related to this project must be addressed to ensure clarity and transparency in all aspects of the work.” So said Akuila Tawake, Deep Sea Minerals Project Team Leader of this European Union (EU) funded project.

Mr. Tawake explained that the Deep Sea Minerals Project is administered by SOPAC, a division of SPC, and is developing a regional legislative and regulatory framework for deep-sea mineral mining.

“This will help ensure that sustainable resource management will bring tangible benefits to Pacific Island Countries and their people, “ said Mr. Tawake.