2015年-世界发展银行全球_The_Cook_Islands___Disaster_Risk_Financing_and_Insurance_54页_7mb

Summary of COOK ISLANDS Disaster Risk Financing and Insurance

Core Content

The Cook Islands is a small island nation composed of 15 islands, with most of its population concentrated on Rarotonga. The country is highly vulnerable to tropical cyclones (TCs), which account for the majority of natural disasters and economic losses. The Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI) has been instrumental in assessing and mitigating disaster risks through various financial tools.

Main Points

1. Geographic and Economic Vulnerability

• The Cook Islands spans nearly 2 million km² of territorial waters, leading to logistical challenges in disaster response.
• The 2011 census reported a resident population of 14,974 and 2,820 temporary residents, with 75% living on Rarotonga.
• The population has been in slow decline since 1965 due to emigration, which poses challenges for skilled labor availability, especially in the tourism sector.
• The economy is tourism, pearl farming, fishing, and agriculture, all of which are susceptible to adverse weather conditions.
• The GDP per capita in 2012 was NZ$15,477 (US$12,686), placing the Cook Islands among the best-performing Pacific economies.

2. Natural Disaster Impact

• Since 1955, the Cook Islands has experienced 28 natural disasters, with 24 being tropical cyclones, 3 earthquakes, and 1 epidemic.
• Tropical cyclones account for 100% of all disaster losses recorded.
• Annual losses due to TCs are estimated at NZ$6 million (US$4.9 million).
• Over the next 50 years, there is a 50% chance of experiencing a loss exceeding NZ$97 million and a 10% chance of a loss exceeding NZ$327 million.

3. Disaster Risk Financing (DRFI) Strategy

• The World Bank promotes a three-tiered approach to disaster risk financing:
  • Self-retention: Contingency budgets and national reserves to handle small, recurring disasters.
  • Contingent credit: For less frequent but more severe events.
  • Disaster risk transfer: Through insurance to cover major natural disasters.

4. Current Financial Tools and Mechanisms

• The Contingency Budget is capped at 1.5% of total appropriations, equivalent to NZ$1.7 million in the 2012/13 fiscal year.
• The Emergency Response Trust Fund (ERTF) was established in 2011 and is limited to emergency response.
  • It covers initial damage assessment, reestablishment of essential services, staff deployment, clearance and repair, and logistical support.
  • The ERTF was fully operational by December 2011 and has a minimum reserve of NZ$500,000.
  • It is expected to be increased to NZ$1 million in the future.
• The Pacific Catastrophe Risk Insurance Pilot provides liquidity within one month of a qualifying disaster.
  • The Cook Islands opted for tropical cyclone coverage at the 1-in-10-year (low) layer, which means it is prepared for more frequent but less severe events.
  • The maximum payout under the pilot is NZ$3.4 million (US$2.79 million).
  • The premium is split equally between state-owned enterprises (SOEs) and the national budget.
  • SOEs receive 50% of any payout.

5. Post-Disaster Budget Mobilization and Execution

• Ex-post financing includes budget reallocation, donor assistance, and contingency fund usage.
• The ERTF is the primary ex-ante tool for disaster response, and its mobilization can occur within one to two weeks.
• Cabinet approval is required for budget reallocation and contingency fund use, which may delay the process.
• The Response Executive (a committee reporting to the cabinet) plays a key role in resource allocation and coordination.

6. Options for Improvement

• Integrated DRFI strategy to better coordinate financial mechanisms.
• Contingent credit mechanisms to access additional liquidity post-disaster.
• Operations manual for post-disaster budget mobilization and execution.
• Insurance program for critical public assets to enhance financial protection.

Key Information

• The Cook Islands has limited domestic financial resources for disaster response, with a maximum of NZ$5.6 million (US$4.6 million) in contingency funds and insurance.
• The probability of disaster losses exceeding contingency funds is 4.9% annually.
• The ERTF is a key ex-ante tool that enables swift and coordinated response to natural disasters.
• The Pacific Catastrophe Risk Insurance Pilot provides model-based payouts, which are faster than traditional insurance.
• SOEs play a role in financing disaster risk insurance, contributing 50% of the premium and receiving 50% of payouts.
• The government has taken a proactive stance in disaster risk financing, supported by international partners such as the World Bank, SPC-SOPAC, and UNDP.

Conclusion

The Cook Islands has made progress in developing financial mechanisms for disaster risk management, particularly through the ERTF and the Pacific Catastrophe Risk Insurance Pilot. However, improvements are still needed in coordinating financial tools, increasing resilience, and ensuring sustainable funding for disaster response and recovery. The country's proactive approach and collaboration with international organizations provide a solid foundation for future disaster risk financing initiatives.