The CEO of the Pacific Catastrophe Risk Insurance Company(PCRIC), Aholotu Palu, has met with a representative of Hiscox Syndicate at Lloyd’s in London to discuss expansion plans.
PCRIC secures the lowest pricing possible for the policies offered to Pacific Island Countries by pooling the risk from each individual country, and then taking a larger portfolio of risk to the international reinsurance market. Through this pooling process and the use of donor capital, PCRIC is able to offer countries cheaper premiums or enhanced coverage compared to international insurers in the private sector.
Since 2020, Hiscox Syndicate has been one of the reinsurers of PCRIC’s policies which takes on a proportion of the risk from country policies, protecting PCRIC’s capital against large losses if one or more large-scale disasters were to occur in the same policy year.
The discussion with Hiscox focused around PCRIC’s plans to grow the Company over the coming years through strong investments in product development, country outreach, and securing premium finance for member countries.
Aholotu Palu said that PCRIC will launch new sovereign parametric products for excess rainfall and drought over the coming year, as part of the Company’s efforts to broaden the product range and serve the needs of a wider group of countries. The product launch will be supported by in-country visits across the region to attract new policyholders and grow the portfolio of policies.
Hiscox Syndicate reaffirmed their support as one of the Company’s key reinsurers, with discussions due to start soon for the upcoming renewal of policies on 1st November 2022.
While in London, PCRIC team also met with World Bank representatives and colleagues of the PCRAFI project to discuss issues of importance to the operation and financial sustainability of the company.
The first topic to be tabled was the development of regulations to support the Pacific Catastrophe Risk Insurance Facility Act 2021 (Act). This was enacted by the Parliament of the Cook Islands which became effective on 06 December, 2021 thereby allowing PCRIC to operate as a segregated portfolio company.
Next on the agenda was the request for a 1.5-year extension of the PCRAFI project which is due to end on 31 December, 2022.
A letter signed by the PCRIF Council of Members and Board Chair along with additional support of Pacific member states has been delivered to the World Bank for consideration.
This is crucial as ongoing World Bank backing will assist in operational costs to service risk pool insurance policy renewals for the new season. A project extension will provide PCRIC with the necessary support as the company continues to grow and develop its financial sustainability by 2024.
The final matter for dialogue was the appropriate approach to the utilisation of the EUR$10 million funding from Germany for premium subsidy. This is particularly critical as PCRIC plans to roll out its new rainfall product before the end of the year and a drought product early next year.
Additionally, PCRIC is also eager to begin its engagement with stakeholders as borders for most Pacific Island nations in the region will re-open in July.