The advent of three tropical cyclones simultaneously in the South Pacific in late February (TC Alfred, Seru and Rae) was a firm reminder of the proximity of the region to the next unpredictable natural disaster. Today’s advanced technology affords us the benefit of early warning advisories, which assist with preparations, but ultimately its only in the aftermath of disaster that we can fully consider the scale and cost of the impact and the recovery task.
It is in this context that PCRIC parametric insurance policies play a unique and vital role in preparations, easing the pressure of financial uncertainty by providing pre-arranged solutions to the financial consequences of a disaster. PCRIC’s first ever NGO client, Fiji’s Vatuvara Founation, had first-hand experience of this in the aftermath of TC Rae.
The Foundation’s policy with PCRIC covers tropical cyclone risk for a highly-valued coral reef in the Northern Lau group of Islands in Fiji, with any payout intended to be used for reef clean-up and restoration activities, and for community livelihood support in the aftermath of a disaster event. As TC Rae tracked southwards across the Lau Islands as a Category 2 tropical cyclone in late February, PCRIC’s post-event loss calculation process was triggered. Reask – the official Calculation Agent for the policy – determined that a payout equivalent to 10% of the coverage limit was due, with PCRIC initiating the payment on Monday 3 March, just 8 days on from when the cyclone passed close to the reef.
Speaking at a recent event to mark the policy payout, Katy Miller, Director of the Vatuvara Foundation expressed gratitude that the impact of TC Rae was not greater, and was quick to amplify the benefits of a pre-arranged solution to help deal with the costs of reef restoration works soon to commence. “PCRIC has delivered entirely in accordance with the detail of our policy. There have been no complex processes or delays we’ve had to address. Payment arrived within 14 days of the event occurring – it is so gratifying that in our time of need we have such a reliable partner in our resilience endeavours”, she said.
PCRIC CEO Mr Aholotu Palu indicated that significant effort has been invested in ensuring PCRIC products were well matched to the needs of clients, stating that this recent event acted to validate the policy design and related processes, ensuring the best possible outcome for clients. He went on to acknowledge the role of WTW as international broker and their role in supporting Vatuvara Foundation and PCRIC with the policy design, IHL as local broker in Fiji, and Reask as Calculation Agent for the policy, which additionally provided early warning support by forecasting payout probabilities several days ahead of time.”