Is the Pacific Catastrophe Risk Insurance scheme an example of successful pooled service delivery?

In a recent assessment of the success or otherwise of pooled service delivery initiatives in the Pacific island region, Matthew Dornan and I did not consider the World Bank-led Pacific Catastrophe Risk Insurance pilot as we felt it was too recently established to provide sufficient information for us to evaluate. Being a pilot it has not had a great deal of exposure. However, it has generated some recent discussion (unfortunately this item credits the Asian Development Bank with having established the scheme) further to its recent payout of US$1.9 million to the government of Vanuatu in the aftermath of Cyclone Pam. This is the second time the scheme has made a payment to one of the pilot member countries, the first being US$1.27 million paid to Tonga further to the passage of Cyclone Ian during January 2014.

Less positive was the experience of Solomon Islands, who withdrew from the scheme after experiencing two events (the Santa Cruz earthquake and flooding in March 2014), neither of which triggered a payment from the scheme despite the fact that they had very severe impacts on the country socially and economically. This has, it would appear, led to the consideration of increasing the range of responses available to better suit members’ needs. Which is what pilot projects are for – to learn. In 2014, the Forum Economic Ministers’ Meeting (FEMM) received a paper that documented the experiences of the member countries that had participated in the scheme up to that point and captured the lessons learned from the pilot project. It highlights the need to develop a wider range of responses with particular reference to the experience of Solomon Islands highlighted above. Further to consideration of this information, the FEMM decided that the scheme should continue and requested that the World Bank examine ways in which this could be effected, including options for future financing. To this end a workshop was convened in Suva in March of this year.