PCRIC COP28 event puts spotlight on parametric solutions for the Pacific

PCRIC COP28 event puts spotlight on parametric solutions for the Pacific | Insurance Business New Zealand

Catastrophe & Flood

PCRIC COP28 event puts spotlight on parametric solutions for the Pacific

Forum hosted distinguished panellists from different major organisations

Catastrophe & Flood

By
Kenneth Araullo

At the recent COP28 event in Dubai, the Pacific Catastrophe Risk Insurance Company (PCRIC) held its first side event, themed around “Embedding Parametric Insurance in the Disaster Risk Financing Toolkit”.

Hosted at the Blue Pacific Pavilion, the event saw collaboration from the Pacific Islands Forum Secretariat (PIFS) and the Secretariat of the Pacific Regional Environment Programme.

Distinguished panellists from various organisations, including the World Food Programme, Global Shield Secretariat, and the United Nations Capital Development Fund, participated in the discussions. The keynote speakers were the Prime Minister of Tonga, Honorable Hu’akavameiliku, and Ben Ponia, representing the Prime Minister of the Cook Islands.

The session, steered by Karlos Moresi from PIFS, explored the significance of risk pooling and the potential role of parametric insurance in resilience building. Hu’akavameiliku underscored the importance of parametric insurance in Tonga’s disaster risk management strategy and acknowledged the support of the international community in enhancing resilience.

“Parametric insurance, as provided by PCRIC, is now a firm staple of Tonga’s disaster risk management strategy. In addition to affirming the importance of parametric risk pooling insurance to a well-equipped DRF toolkit, it is important that I too take this opportunity to recognise the support of the international community,” Hu’akavameiliku said.

Ponia, speaking for the Cook Islands, recognised the efforts of Pacific Leaders in addressing the climate crisis and highlighted the effectiveness of parametric insurance, thanking Germany for its support of the Pacific Resilience Fund.

“It’s enabling the Cook Islands to increase the value of its policies. And for the first time, because we have been budgeting and paying for this insurance product, we can draw on that subsidy,” Ponia said.

PCRIC’s role in addressing the protection gap in the Pacific

Astrid Zwick, from the Global Shield Secretariat, acknowledged PCRIC as a crucial partner in the Pacific, emphasising the need for pre-arranged finance to address the protection gap in disaster losses.

“The protection gap is huge, that means that only up to 1% or 2% of the losses are basically covered. That means people are suffering, that means people need to get some help, and help we can find through pre-arranged finance. Pre-arranged finance is important because you also learn about how to manage your risks, understand your risks better and then work out and develop the right instruments that need to be taken,” Zwick said.

Gernot Laganda, from the World Food Programme, also pointed out the necessity of integrating insurance with other risk management strategies.

Ponia concluded the event by calling for collective action and shared responsibility, inviting continued partnership from the international community.

“Let us reaffirm our unified commitment to protecting and empowering our Pacific Island nations through our joint efforts in collaboration, innovation, and shared determination. We are not just confronting challenges – we are paving the way for a resilient and sustainable future,” Ponia said.

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