Cyclone Pam triggers disaster risk payout to Vanuatu
Island nation to receive USD 1.9 million from the World Bank's Pacific Catastrophe Risk Insurance Pilot, a project in which Swiss Re is a contributing partner.
Three years ago, taking its first steps to increase financial disaster resilience, the Vanuatu government participated in the regional disaster insurance scheme, Pacific Disaster Risk Financing and Insurance Programme: The Pacific Catastrophe Risk Insurance Pilot. It is now clear that Cyclone Pam triggered the criteria outlined in the parametric insurance scheme, and Vanuatu has received USD 1.9 million to support relief and recovery.
It's the second time the PCRI pilot has paid out: In January 2014 Tonga received USD 1.3m in the wake of Tropical Cyclone Ian.
More to be done to build resilience
Formerly known as the New Hebrides, Vanuatu is one of the poorest nations on earth, made up of about 260,000 people spread across more than 80 islands northeast of Australia. Perched on the Ring of Fire, it is battered by frequent earthquakes and tsunamis and has several active volcanoes. The remoteness of the islands makes relief operations a tremendous logistical challenge.
Pam has clearly demonstrated how important it is to continue to improve the resilience of Pacific island nations. Risk reduction and preparedness need to become an integral part of investment and development. Risk transfer schemes such as PCRI can be used to leverage climate adaptation, development or humanitarian aid funds.
Putting Sendai into practice
Ivo Menzinger, Head Global Partnerships Asia and responsible for Swiss Re's contribution to the World Bank led insurance scheme, explains that its parametric structure has allowed for a swift payout to Vanuatu just 10 days after the event. "While this payout covers only a fraction of the financial and economic losses the nation is faced with, the swift cash contribution will support relief and recovery efforts," he said.
"It is now time to move from pilots to full scale implementation of disaster risk financing schemes to secure more meaningful contributions in the future. I am encouraged by the discussions stakeholders from both the public and the private sectors had at the 3rd UN World Conference for Disaster Risk Reduction in Sendai."
Published 1 April 2015