Tonga renews parametric reinsurance with PCRIC to boost disaster resilience

The Kingdom of Tonga has strengthened its disaster risk financing by renewing its parametric reinsurance policies with the Pacific Catastrophe Risk Insurance Company (PCRIC), which includes a significant increase in the government’s premium contribution, from USD 125,000 to USD 1 million.

This renewed policy is expected to provide comprehensive coverage of up to USD 17 million for four perils: tropical cyclone, earthquake, tsunami and drought.

PCRIC provided an update on its ongoing initiatives and outlined the path forward for strengthening Tonga’s disaster risk financing framework.

Aholotu Palu, PCRIC CEO, highlighted: “Tonga’s decision to increase its premium contribution marks a bold and proactive step in safeguarding its economic development through disaster risk financing.

“This enthusiasm demonstrates the government’s dedication to strengthening national resilience against the growing risks posed by climate change and natural disasters.”

The announcement came as PCRIC provided an update on its ongoing initiatives aimed at bolstering Tonga’s disaster risk financing framework.

The update covered a wide array of PCRIC’s activities, including efforts to engage with State-Owned Enterprises (SOEs) and the vital tourism sector to develop tailored disaster risk solutions.

In addition, the discussions highlighted ongoing efforts to build stronger partnerships with donors, enhance product development, and ensure the renewal of policies that will support Tonga’s resilience in the face of natural disasters.

Other key topics include support for capacity-building efforts with national governments, PCRIC’s ongoing education project, the formulation of country contingency plans and the development of PCRIC’s new Strategic Plan.

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