The World Bank has issued its first insurance payout under the Pacific Catastrophic Risk Insurance pilot program. Tonga will receive $1.27 million to help with disaster relief associated with Cyclone Ian, which took place on January 11. Ian was the equivalent of a Category 4 or 5 hurricane, with gusts up to 178 miles per hour.
Under the program started in January 2013, the World Bank acts as an intermediary purchasing catastrophic risk coverage from private insurers including Sompo Japan Insurance, Mitsui Sumitomo Insurance, Tokio Marine & Nichido Fire Insurance, and Swiss Re to cover nation participants. Modeled after a similar program in the Caribbean, the six island countries in the PacCat trial program include Tonga, Marshall Islands, Solomon Islands, Samoa, Vanuatu, and the Cook Islands. The premiums for the coverage for all participants excluding one is currently co-financed by Japan. The exception is the Cook Islands, which finances the premium itself. One of the benefits of the program is that payments can be made relatively quickly using damage models instead of waiting for detailed assessments to be completed.
Tonga to Receive US $1.27 Million Payout for Cyclone Response