Fiji has joined the Pacific Catastrophe Risk Insurance Company (PCRIC), a parametric disaster insurance pool for the Pacific, and signed a commitment letter for the country’s first ever parametric insurance product.
The signing of the agreement took place in Morocco, with Deputy Prime Minister and Minister for Finance Professor Biman Prasad, alongside Sarah-Jane Wild, Chair of the PCRIC.
Fiji is a country vulnerable to tropical cyclones, floods, and other climate-related disasters – which causes damage, disruption and financial burdens to the government’s balance sheet -, and with cyclone season soon to arrive, the introduction of the “Cat-in-a-Circle” product was very much welcomed.
This insurance covers cyclones of Category 3 and above within specified coastal areas, including Viti Levu, Vanua Levu, Yasawa’s and Kadavu.
The potential coverage limit available for the “Cat-in-a-Circle” product is dependent on the transfer of the risk to an international reinsurer but is targeted to be in the range of US$9 million to US$10.5 million for a total premium of US$1.5 million.
The Deputy Prime Minister stated that, by committing to the sovereign parametric insurance covers, Fiji aims to achieve its objective of assisting natural calamities, building resilience and strengthening the sovereign balance sheet from disaster risks.
The Chair of the PCRIC thanks the Fiji Government for the signing of the commitment letter and highlighted the advantages of PCRIC’s pooled-risk approach to disaster risk insurance, and a collaborative approach to the financial challenges confronting nations in the wake of a major disaster, can served to deliver better outcomes for all in their most pressing time of need.
PCRIC is a captive insurance company working in collaboration with all member countries of the Pacific Islands Forum Secretariat. It holds key networks with its support agencies such as The Caribbean Catastrophe Risk Insurance Facility and The African Risk Capacity.
Fiji is currently a foundation member, alongside MArshall Islands, Vanuatu, Tonga, Samoa and Cook islands. Policy holders include Cook Islands, Samoa and Tonga.
