Cook Islands Confirms Participation in the Pacific Catastrophe Risk Insurance Pilot

The Cook Islands Government has confirmed its participation in the Pacific Catastrophe Risk Insurance Pilot (PCRIP), which was renewed for its third season with five other Pacific island countries: Marshall Islands, Samoa, Tonga, Vanuatu, and Cook Islands. The third season will run from November 1, 2014 to October 31, 2015.

As of 1 November 2014, the Cook Islands is covered against emergency losses caused by major Tropical Cyclones for a 12 month period until October 31, 2015. The premium of USD100,000 paid by the Government was able to secure catastrophe risk insurance coverage which will provide an immediate payout of up to USD2.8 million in the case of a major tropical cyclone hitting the major centres of Rarotonga and Aitutaki.

The premium cost was shared between the major SOE’s (Ports Authority, Airport Authority and Te Aponga Uira) and the central government.

Minister for Finance, the Honourable Mark Brown, outlined the PCRIP was part of the Government’s active policy of improving the economic resilience of the Cook Islands.

“The coverage provided through the PCRIP as well as increasing the Natural Disaster Response Fund to $0.636 million provides the Government with the financial capacity to respond confidently and immediately to the needs of the community in the case of a significant natural disaster. It is not a case of if, but when we are struck by a cyclone we want to be focused on meeting the immediate needs of the community to ensure their lives get back on track. These two initiatives of the Government will let us focus on that as opposed to worrying about the financial impacts. We are putting money away for the eventual rainy day.”