Samoa, Solomon Islands, Tonga, The Marshall Islands and Vanuatu adopted the newly launched Pacific Catastrophe Risk Insurance Pilot program. It will provide the governments with immediate funding in case of a natural disaster.
The program relies on financial risk modeling techniques, developed by AIR Worldwide, and is the first of its kind in the Pacific region. The whole idea is quite simple. If a certain catastrophe strikes any of the five countries, the modelled loss approach will be used to estimate the damage and within a short period of time the payouts will be enabled. Access to emergency funding will allow governments to start a post-disaster recovery as soon as it is only possible.
The risk insurance project is a joint effort of the World Bank, the Secretariat of the Pacific Community and the government of Japan. The four insurance companies involved are: Sompo Japan Insurance, Mitsui Sumitomo Insurance, Tokio Marine & Nichido Fire Insurance and Swiss Re.
If the pilot program turns out to be a success, it will include more Pacific Island states in the future.