Interest in disaster insurance subsidies
THERE is growing interest from the world’s more developed countries to subsidise premiums for developing nations that wish to insure themselves against natural disasters, said Pacific Catastrophe Risk Insurance Company (PCRIC) chief executive officer Aholotu Palu.
PCRIC, a company collectively owned by Pacific island countries that are members of the PCRIC council, which includes Fiji, was up in 2016 and now helps its member countries to insure themselves against natural disasters on a collective level. It is currently holding a three-day workshop for stakeholders in Suva, which will end today.
“In the beginning of the last two years, when we were asking the big countries to consider premium subsidies as a way to support smaller countries, it was a no go. No discussion. They shut you up,” Mr Palu said in an interview with The Fiji Times.
“Now there is a global shift. They now look at premium as a good vehicle to build resilience in the smaller countries because of climate change.
“So the prediction that I have now is there will be some sort of a long term support for subsidies continuing to the countries.”
Germany, he said, has given 10million euros ($F24m) for premium subsidisation and indications are that more countries will come on board.
“We are planning to spend that for subsidies over the next five years,” Mr Palu said. Last year, Fiji bought its first sovereign parametric insurance cover, for tropical cyclones and high rainfall, in an agreement signed with PCRIC, for an annual premium payment of $1.5million and a potential payout of $US10m ($F22.45m), a move that was hailed by PCRIC as it helped set the stage for other countries in the Pacific to join the initiative.
“You know us in the Pacific. Insurance is not something that’s in our blood.
“We just wait until something happens then we react. “We have to move away from reactiveness and be more proactive, meaning, we put aside money for the rainy days. And especially now with climate change, weather is very unpredictable — it can happen tomorrow, it can happen next week.
“So the fact of the matter is we have the money and we’re living in countries that are highly exposed to climate change. It’s about time we change.”
So far, Fiji, Tonga, Samoa, Cook Islands, Marshall Island, Vanuatu and Niue are members of the PCRIC Council with Papua New Guinea expecting to sign at the end of this month.