In January 2013, the World Bank placed on the international reinsurance markets a portfolio of catastrophe swap contracts that transferred catastrophe risk from five Pacific Island Countries (PICs)—the Marshall Islands, Samoa, the Solomon Islands, Tonga and Vanuatu. The pilot was supported by the government of Japan, the World Bank Group, the Global Facility for Disaster Reduction and Recovery, and the Secretariat of the Pacific Community (SPC). The placement was a result of extensive technical work taking place over a period of more than one year and including design, implementation, and intermediation of the catastrophe swap contracts. The program has been renewed twice since its initial setup, and country participation and coverage have evolved. The Cook Islands, the Marshall Islands, Samoa, Tonga, and Vanuatu all joined the third season of the pilot, which started on November 1, 2014.
This insurance pilot is part of a broader program, the Pacific Disaster Risk Financing and Insurance (DRFI) Program, which aims to increase the financial resilience of PICs to natural disasters and to improve their post-disaster financial response capacity.