View this article online: https://www.claimsjournal.com/news/international/2014/01/28/243507.htm
The World Bank today announced that Tonga will be the first country to benefit from a payout under the Pacific Catastrophe Risk Insurance Pilot and will receive an immediate payment of US $1.27 million towards recovery from Cyclone Ian.
The Category 5 Cyclone, which swept across Tonga’s Ha’apai island group on January 11 and 12, 2014, caused one tragic death, displaced thousands and caused major devastation to crops and infrastructure. According to reports, up to 75 percent of buildings have been damaged in some parts of Ha’apai, as well as power and communication networks.
Tonga is one of 6 Pacific island countries – together with Cook Islands, Marshall Islands, Samoa, Solomon Islands and Vanuatu – currently participating in the Pacific Catastrophe Risk Insurance Pilot. Launched in January 2013, the pilot tests a risk transfer arrangement modeled on an insurance plan, and uses ‘parametric triggers’, such as cyclone intensity or earthquake magnitude to determine payouts, which allows for quick disbursements.
The World Bank acts as an intermediary between Pacific island countries and a group of reinsurance companies – Sompo Japan Insurance, Mitsui Sumitomo Insurance, Tokio Marine & Nichido Fire Insurance and Swiss Re. AIR Worldwide provides the underlying risk modeling for the transaction. The Government of Japan currently co-finances the insurance premiums of Tonga, Marshall Islands, Samoa, Solomon Islands and Vanuatu. Cook Islands fully fund their insurance premium from their own sources.
As part of a broader response to Cyclone Ian, the World Bank is also supporting damage assessments in Ha’apai that will enable the Government of Tonga to gain a full picture of the damage sustained, so that it can rebuild affected areas and increase disaster resilience for the future.
Source: World Bank