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Financing disaster risk management
March 2014 saw representatives from six Pacific
Island countries come together in Tonga to discuss
ways to finance disaster risk management. High
on the agenda was progress in the regional Pacific
Catastrophe Risk Insurance pilot – a project designed
to test how well commercial insurance might assist
governments to access funds after a disaster and help
get them back on their feet. Tonga recently became
the first of six participating countries to benefit from
the pilot, receiving a pay-out of USD 1.27 million two
weeks after Tropical Cyclone Ian hit in January 2014.
The workshop in Tonga forms part of the capacity-
building work of the Pacific Disaster Risk Financing
and Insurance (DRFI) programme – an application
of the Pacific Catastrophe Risk Assessment and
Financing Initiative (PCRAFI), presently being executed
by SPC in tandem with the World Bank. The DRFI
programme aims to increase the financial resilience
of Pacific Island countries to disasters by improving
their financial response capacity following major
catastrophic events, as well as to provide immediate
liquidity in their aftermath. Along with piloting the
risk insurance scheme, DRFI delivers advisory services
to governments to improve their macro-economic
planning for natural disasters and develop national
disaster risk financing strategies as part of a broader
disaster risk management and climate change
adaptation agenda.
As well as sharing experiences with the financial instruments they use in-country to improve post-disaster
response capacity, country representatives at the meeting made a number of recommendations for Ministers
of Finance to potentially discuss at the forthcoming Forum Economic Ministers’ Meeting:
1. The establishment of the Pacific Catastrophe Risk Insurance Facility as a dedicated regional entity to
continue and expand the Pacific DRFI programme by 2016.
2. The need to secure funding to resource the Facility for the next 15 years, including contributions from
donors and member countries.
3. Request theWorldBank toexploreoptions topreparea regional andnational International Development
Association-funded programme to support the establishment of the facility and finance resilient
development.
For further information on the Pacific Disaster Risk Financing and Insurance programme, see:
http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTFINANCIALSECTOR/EXTDISASTER/0,,contentMDK:
23093927~menuPK:8707838~pagePK:64168445~piPK:64168309~theSitePK:8308421,00.html
or
contact Mosese Sikivou on
Participants of the recent Pacific Disaster Risk Financing and Insurance Workshop 20-21 March, 2014, Tonga