Climate vulnerable communities of Pacific Island Countries supported by the Global Shield

• Pacific Island Countries threatened by climate risks receive financial support
• Funding is provided via the Global Shield Solutions Platform, managed by Frankfurt School of Finance & Management

The Global Shield against Climate Risks supports the climate vulnerable communities of Pacific Island Countries via a 10m EUR contribution by the German Ministry for Economic Cooperation and Development (BMZ) dedicated to the Pacific Catastrophe Risk Insurance Company (PCRIC). The support is provided via the Global Shield Solutions Platform, managed by Frankfurt School of Finance & Management.

In light of the escalating impact of climate change, evidenced by heightened intensity and frequency of disasters globally, Pacific Island Countries (PICs) are particularly vulnerable. They are exposed to a range of adverse events, including tropical cyclones, droughts, and floods, which can have widespread repercussions on their populations, economies, and physical environments.

The Global Shield Solutions Platform (GSSP), managed by Frankfurt School, and the Pacific Catastrophe Risk Insurance Company (PCRIC) announced today the signing of a comprehensive cooperation agreement to enhance the resilience of PICs by collectively mitigating risks and ensuring swift access to fund during critical times.

In response to the pressing challenges, the strategic partnership between the GSSP and PCRIC, will strengthen a proactive approach to disaster risk management. With the funding of the GSSP, PCRIC will be able to offer member countries premium support and thus increase accessibility to pre-arranged financial protection under the umbrella of the Pacific risk pool. The primary goal is to ensure the availability of liquidity, enabling governments to expedite relief efforts promptly following a disaster. The GSSP will support PCRIC through multi-year premium financing support in line with the InsuResilience Principles for SMART Premium and Capital Support.

Dr. Annette Detken, head of the Global Shield Solutions Platform, said: “Pacific Island Countries are among the most climate vulnerable in the world, with related damage estimated at around 10% of their GDP, or USD 1 billion annually.   As climate hazards intensify across the Pacific region, the significance of climate disaster risk finance and insurance becomes increasingly evident. By providing parametric insurance products, PCRIC assists PICs and their vulnerable populations in delivering reliable and timely fund disbursement and facilitates the inflow of disaster response capital to the region in the aftermath of a disaster.”

The GSSP, managed by Frankfurt School of Finance & Management, will support PCRIC through dedicated funding by the German Ministry for Economic Cooperation and Development (BMZ) to allow PICs contributions to the premiums to increase over time, and in alignment with PCRIC’s current premium support arrangements.

“Fiji appreciates the partnership between the Global Shield Solutions Platform and PCRIC, which will bolster our efforts in disaster risk financing. With increased financial support, we can better prepare for and respond to the adverse impacts of climate change, safeguarding our vulnerable communities and fostering resilience.” – Shiri Krishna Gounder, Permanent Secretary for the Ministry of Economy Fiji.

“Samoa is grateful to have a regional institution like PCRIC dedicated to disaster risk finance. However, we recognize that PCRIC alone cannot address all our disaster risk finance needs. Comprehensive protection requires a blend of financial instruments and strategies.” – Saoleititi Maeva Betham-Vaai CEO for Ministry of Finance, Samoa.

“Tonga's unwavering support for PCRIC comes from our firsthand experience of the benefits. We have been the highest recipient of payouts following multiple cyclones. Our enduring partnership symbolizes our shared commitment to building a resilient future for Tonga's communities by accessing DRF instruments such as PCRIC's parametric insurance, to supplement our fiscal balances when a disaster strikes.” – H.E. Kilisitina Tuaimei’api, CEO for Ministry of Finance, Tonga.

About the Global Shield against Climate Risks

With accelerating climate change, more severe and frequent extreme weather events are expected to threaten sustainable development gains of particularly vulnerable countries. To address this, the V20 Finance Ministers together with the Group of Seven (G7) and other supporting countries, launched the Global Shield against Climate Risks at COP27. The aim of the Global Shield is to increase protection for vulnerable people by providing and facilitating substantially higher and more effective pre-arranged finance against disasters.

About the Global Shield Solutions Platform

The Global Shield Solutions Platform (GSSP) is a multi-donor grant facility and one of the financing vehicles under the Global Shield against Climate Risks. With the mandate to foster the actual development and use of Climate and Disaster Risk Finance and Insurance (CDRFI) solutions, the GSSP contributes to effectively addressing losses and damages exacerbated by climate change.

About PCRIC

PCRIC was created in 2016, following a decision made by the pacific finance ministers in their 2015 annual conference (FEMM), to move the dial on DRM in the Pacific Island Region from a reactive to a more proactive approach, and also to develop more resilience for the Pacific Island Countries (PICs). PCRIC’s fundamental purpose is to reduce the risk of a “disaster” becoming a “crisis” through timely access to guaranteed finance. The finance is delivered through PCRIC’s sovereign parametric disaster risk insurance products to the PICs.