Fiji has signed a commitment letter for the country’s first parametric insurance product with the Pacific Catastrophe Risk Insurance Company (PCRIC).
Fiji’s Deputy Prime Minister and Minister for Finance, Biman Prasad, and Sarah-Jane Wild, chair of the PCRIC board signed the letter in Morocco on Monday.
PCRIC is a regionally focused captive insurance company owned by Pacific Island nations through the Pacific Catastrophe Risk Insurance Foundation (PCRIF), based in the Cook Islands.
Prasad noted the product is “very timely” for Fiji as the cyclone season approaches.
“Fiji is highly vulnerable to disasters which causes extensive damages to our infrastructure, affects livelihoods and imposes substantial financial bearing on Government’s balance sheet almost every year,” he said.
He said the reality is Fiji must “fork out more money from Government’s coffers” towards responding in times of emergencies, building climate resilient infrastructure and relocation of population affected by rising sea levels and loss of arable lands.
Fiji has been trying to expand its options for cover and has taken up a concessional standby loan from JICA with disbursement contingent upon declaration of a state of disaster.
The Fiji government has also added the World Bank Catastrophic Drawdown Option (CAT DDO) to its disaster risk financing options to assist it with quick disbursement after natural disasters.
Country members of the PCRFI are Cook Islands, Fiji, Marshall Islands, Samoa, Tonga and Vanuatu.
All other member nations of the Pacific Island Forum Secretariat (PIFS) are eligible and are encouraged to become members.