Disaster risk financing

THE Pacific Insurance and Climate Adaptation Programme (PICAP) was created to respond to the growing needs for disaster risk financing solutions for natural hazards in the region.

A statement from the Pacific Financial Inclusion Programme (PFIP) yesterday stated that the PICAP implementation framework, which covers the need and demand for disaster risk financing, intervention logic, proposed workstreams, potential products to be developed as well as possible partnerships, was presented and discussed with stakeholders at a workshop on October 1 in Suva, Fiji and Apia, Samoa on October 3, 2019 with similar sessions to be held in Solomon Islands and Papua New Guinea on October 9 and 15.

It said PFIP and the Munich Climate Insurance Initiative (MCII) would further assess the opportunities for setting up a climate adaptation and risk insurance program in Papua New Guinea, Samoa, and Solomon Islands.

According to the statement the team will meet a wide array of stakeholders, government representatives, meteorological departments, farmer co-operatives, financial services providers, and donors to understand their specific needs and identify opportunities for a comprehensive climate adaptation and disaster risk finance program for Pacific Island states.

PFIP believes that with the changing of climate and the ever-growing intensity of natural hazards, having financial mechanisms in place to quickly cope with such events can assist in offsetting loss and damage.

It said a scoping study was thus conducted in February 2019 by PFIP and MCII to explore the possible implementation of climate risk adaptation and disaster risk financing mechanisms in the Pacific and highlighted that one potential financial instrument was climate risk insurance, which paid out to beneficiaries quickly after a triggered event.