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Samoa adaptation plan urges more parametric coverage and regional cat bonds
The plan recommends adding drought and flood triggers to parametric products under PCRAFI 2.0 and links faster payouts, targeting disbursement within 10 days via the national disaster management plan.
Artemis reports that a national adaptation plan prepared for the government of Samoa calls for scaling up parametric protection across the Pacific region and expanding existing risk pools to cover more perils. The plan also suggests that a regional catastrophe bond should be planned to provide additional risk capacity in the future, as part of broader efforts to improve resilience to climate related hazards.
Samoa already has parametric insurance protections in place through the Pacific Catastrophe Risk Insurance Company, or PCRIC, according to Artemis. The adaptation plan highlights the need to increase available risk transfer capacity, including through scaling financing and risk transfer instruments tied to PCRAFI, the Pacific Catastrophe Risk Assessment and Financing Initiative.
Artemis says the Samoa plan calls for adding drought and flood triggers to the parametric products developed under PCRAFI 2.0, and integrating parametric triggers into Samoa’s National Disaster Management Plan to disburse funding more quickly within 10 days. The plan also points to using catastrophe bonds either as multi country coverage, potentially issued by a development bank, or to support reinsurance needs for PCRIC or risk pools under the PCRAFI 2.0 phase.
Artemis adds that the approach could broaden the use of parametrics beyond insurance and risk transfer arrangements into other financing tools, and frames catastrophe bond development as a potential avenue for diversifying capital markets support for Samoa and the region.