Knowledge Note

The Pacific Island Countries (PICs) are among the top 30 nations in the world most vulnerable to natural disasters. When a disaster strikes, governments in these countries often struggle to secure liquidity for swift post-disaster emergency response because they are constrained by their small populations, borrowing capacity, and access to international markets, as well as the size of local economies.The pilot program is a risk pooling mechanism that allows participating countries to purchase catastrophe risk insurance coverage as a group at a significantly lower cost than if each country purchased the insurance independently.

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