Publication: The Cook Islands: Disaster Risk Financing and Insurance
Loading...
Published
2015-02
ISSN
Date
2015-04-06
Author(s)
Editor(s)
Abstract
This country note is produced is part of The Pacific Catastrophe Risk Assessment andFinancing Initiative (PCRAFI). The geographic spread of the Cook Islands poses logistical problems for any necessary post-disaster relief and response efforts. The events of 2005 demonstrated that the Cook Islands is extremely vulnerable to the threat of tropical cyclones (TCs): in the two months of February and March 2005, TCs Meena, Nancy, Olaf, Percy, and Rae swept the country. The Cook Islands is expected to incur, on average, about NZ$6 million (US$4.9 million) per year in losses due to tropical cyclones. In the next 50 years, the Cook Islands has a 50 percent chance of experiencing a per-event loss exceeding NZ$97 million (US$79.5 million. The Cook Islands has a proactive approach to disaster risk financing and insurance (DRFI), which is supported by the upper echelons of government. In January 2011, the prime minister in his role as chair of the National Disaster Risk Management Council requested that the Ministry of Finance and Economic Management look at ways to become self-reliant in initial disaster response and generate new income streams for investment in a fund specifically for disaster management response and recovery. The Cook Islands has available a maximum amount of NZ$5.6 million (US$4.6 million) in the form of contingency funds and catastrophe risk insurance to facilitate disaster response. A number of options for further improving the Cook Islands financial protection against disasters are presented for consideration: (a) the development of an integrated DRFI strategy; (b) investigation of using contingent credit to access additional liquidity post-disaster; (c) development of an operations manual for post-disaster budget mobilization and execution; and (d) the identification of assets to be included in an insurance program for critical public assets.
Link to Data Set
Citation
“World Bank. 2015. The Cook Islands: Disaster Risk Financing and Insurance. © World Bank. http://hdl.handle.net/10986/21697 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Fiji(Washington, DC, 2015-02)This note aims to build understanding of the existing disaster risk financing and insurance (DRFI) tools in use in Fiji and to identify gaps where potential engagement could further develop financial resilience. In addition the note aims to encourage peer exchange of regional knowledge, specifically by encouraging dialogue on past experiences, lessons learned, optimal use of these financial tools, and the effect they may have on the execution of post-disaster funds. In 2012 alone Fiji experienced three major events with estimated total damage of F$146 million (US$78 million). Fiji is expected to incur, on average over the long term, annual losses of F$158 million (US$85 million) due to earthquakes and tropical cyclones. In the next 50 years Fiji has a 50 percent chance of experiencing a loss exceeding F$1,500 million (US$806 million). The country has a taken a proactive approach to DRFI and developed a finance manual for post-disaster budget execution. The government now has F$3 million (US$1.6 million) available in DRFI instruments to facilitate disaster response and also implemented tax concessions to encourage donations in the wake of tropical cyclone Evan. A number of options to support ongoing DRFI improvements in Fiji are presented for consideration: (a) the finance manual developed by the Ministry of Finance for post-disaster procedures should be finalized, and cabinet approval should be sought; (b) an overarching disaster risk financing and insurance strategy should be developed that includes options for risk transfer; and (c) assets should be identified in order to develop an insurance program for critical public assets.Publication Marshall Islands(Washington, DC, 2015-02)This note aims to build understanding of the existing disaster risk financing and insurance (DRFI) tools in use in The Marshall Islands and to identify gaps where potential engagement could further develop financial resilience. The likelihood that a hazardous event will have a significant impact on the Marshall Islands has risen with the increasing levels of population and assets in the urban areas of Majuro and Ebeye. The low-lying atolls are at risk of damage to both assets and people as a result of storm surges and tsunamis. The Marshall Islands is expected to incur, on average over the long term, annual losses of US$3 million due to earthquakes and tropical cyclones. In the next 50 years, the Marshall Islands has a 50 percent chance of experiencing a loss exceeding US$53 million. The government takes an ex-ante approach to financing the cost of disasters, but the resources available are limited. The Marshall Islands has a maximum amount of US$15.6 million potentially available in ex-ante instruments to facilitate disaster response. The government s post-disaster budget execution process relies on a variety of financial tools, but the size of the economy limits access to immediate post-disaster cash resources. A number of options for improving disaster risk financing and insurance are presented here for consideration: (a) develop an integrated disaster risk financing and insurance strategy; (b) assess the domestic insurance market for both public and private assets to establish what products are currently offered and to determine their level of uptake; (c) carry out a quantitative analysis to determine whether contingent credit could be an effective tool to access additional liquidity post-disaster; and (d) investigate the possibility of establishing policies for financial assistance to disaster victims in remote communities.Publication Financial and Fiscal Instruments for Catastrophe Risk Management : Addressing Losses from Flood Hazards in Central Europe(Washington, DC: World Bank, 2012-07-05)This report addresses the large flood exposures of Central Europe and proposes efficient financial and risk transfer mechanisms to mitigate fiscal losses from natural catastrophes. In particular, the Visegrad countries (V-4) of Central Europe, namely, Poland, the Czech Republic, Hungary, and the Slovak Republic, have such tremendous potential flood damages that reliance on budgetary appropriations or even European Union (EU) funds in such circumstances becomes ineffective and does not provide needed cash funds for the quick response and recovery needed to minimize economic disruptions. The report is primarily addressed to the governments of the region, which should build into their fiscal planning the necessary contingent funding mechanisms, based on their exposures. The report is addressed to finance ministries and also to the insurance and securities regulators and the private insurance and capital markets, which may all play a role in the proposed mechanisms. An arrangement using a multi-country pool with a hazard-triggered insurance payout mechanism complemented by contingent financing is proposed, to better manage these risks and avoid major fiscal volatility and disruption.Publication Assessment of the Private Health Sector in the Republic of Congo(Washington, DC: World Bank, 2012-09-11)The private health sector was officially recognized in the Republic of Congo over 20 years ago June 6, 1988, establishing the conditions for the independent practice of medicine and the medical-related and pharmaceutical professions. The Congolese government recently expressed its commitment to working with the private health sector in order to strengthen the health system, improve the health of the population and preserve the basic human right to a healthy life through the National Health Care Policy, which it adopted in 2003, the 2007-2011 National Health Development Plan and the 2010 Health Care Services Development Program. Throughout these various documents there is an acknowledgement that the lack of coordination with the private health sector is a weakness of the health system. Nevertheless, the scarcity of information about the private sector in policy and planning documents suggests that the government's engagement with the private health sector is limited. There is no official government policy on the private health sector, or strategies or working plans to encourage cooperation between the public and private sectors. The objective of this assessment was to better determine the role, position, and importance of the private sector within the health system, in order to identify the limitations to its development as well as ways it can be integrated into the efforts to meet the objectives of the Plan national de developpement sanitaire (PNDS) [National Health Development Plan]. The World Bank Group contracted with the Results for Development Institute (R4D, United States) and Health Research for Action (HERA, Belgium) as well as with a team of local consultants, to conduct a 'study of the private health sector in the Republic of Congo.' This study was conducted in close collaboration with the Ministry of Health and Population (MSP), which arranged and oversaw a steering committee consisting of actors from the public and private sectors to facilitate and guide the study. The goal of the study and the workshops was a concrete plan of action for the health sector that could be used by the Congolese government, the private sector in the Republic of Congo, and international development partners. Certain aspects of the action plan should be included in the work programs of the Programme de developpement des services de sante (PDSS) [Health System Development Project] for the years 2011-2013.Publication Financial and Fiscal Instruments for Catastrophe Risk Management : Addressing Losses From Flood Hazards In Central Europe (Poland, Czech Republic, Hungary and Slovakia)(World Bank, 2011-07-01)This report addresses the large flood exposures of Central Europe and proposes efficient financial and risk transfer mechanisms to mitigate fiscal losses from natural catastrophes.. The report is primarily addressed to the governments of the region which should build into their fiscal planning, the necessary contingent funding mechanisms, based on their exposures. While there exist pan-European mechanisms such as the EU Solidarity Fund to help EU members fund mega disasters, these only kick in at extremely high loss levels. Given these issues, the Governments of the V-4 countries should consider it a priority to set up risk transfer mechanisms to reduce fiscal volatility following natural catastrophes. The private sector insurance markets in the V-4 countries appear adequate and reflect rather high levels of penetration in the economy and in the housing sector. Economic and fiscal analyses based on global data also show that countries with insurance mechanisms and markets show a stronger GDP recovery path and lower fiscal deficits following a disaster. However, the V-4 countries, having a common hazard of flood, are in a unique position to develop highly cost effective flood insurance mechanisms. As countries in general are more concerned with supplemental fiscal resources rather than individual property losses, the governments of the V-4 countries can consider parametric style contracts. Nevertheless, risk transfer or insurance mechanisms are not the only types that need to be considered. The analysis in this report is meant to show, besides the financial mechanisms that would be beneficial for risk management, what large catastrophe exposures exist and their relation to government finances and macroeconomic measures. Following a final phase of feasibility analysis and market testing, the V-4 countries should thus consider establishing a multi-country insurance pool to provide fast emergency funding after disasters.
Users also downloaded
Showing related downloaded files
Publication Thailand Monthly Economic Monitor, October 2025(Washington, DC: World Bank, 2025-10-22)Fiscal conditions remained stable, with a modest widening of the deficit to 3.1 percent of GDP. New stimulus measures are expected to support short-term demand without breaching the public debt ceiling. Inflation stayed negative, reflecting lower energy and food prices amid subdued domestic demand. The central bank kept the policy rate unchanged, citing limited policy space. Thailand’s growth momentum has slowed further as manufacturing activity and services weakened as projected. Tourism remained subdued, largely due to fewer Chinese visitors. Goods exports also slowed as earlier front-loaded orders faded, particularly in agriculture and industrial goods. The Thai baht depreciated in early October as the US dollar appreciated and the current account turned negative.Publication Ukraine Country Environmental Analysis(World Bank, Washington, DC, 2016-01)The objective of the Country Environmental Analysis (CEA) is to assess the adequacy and performance of the policy, legal, and institutional framework for environmental management in Ukraine, in light of the decentralization process of environmental governance and wider reform objectives, and to provide recommendations to government to address the key gaps identified. Ukraine is the second largest country in Europe and has a population of 43 million, the majority of whom live in urban areas. It is a lower middle income country, with the services, industry and agriculture sectors being main contributors to the country’s Gross Domestic Product (GDP). Ukraine faces a number of environmental challenges, as identified in its National Environmental Strategy 2020 (NES). Key among these are: air pollution; quality of water resources and land degradation; solid waste management; biodiversity loss; human health issues associated with environmental risk factors; in addition to climate change. The scope of Ukrainian environmental legislation is quite broad and comprehensive (more than 300 legal acts) and covers most areas of environmental protection and natural resources management. However, the environmental legislation faces a number of weaknesses:The environmental legislation is largely declaratory in nature and does not have all the essential enforcement mechanisms for the implementation of legal acts and international agreements; Many of the acts are not coordinated with each other; and Legislation undergoes limited analysis of its impact—for example, no in-depth analysis such as Regulatory Impact Analysis is conducted for proposed pieces of legislation.Publication Regional Poverty and Inequality Update: Latin America and the Caribbean, October 2025(Washington, DC: World Bank, 2025-10-23)This brief summarizes recent facts related to poverty and inequality in Latin America and the Caribbean (LAC) using the latest wave of harmonized household surveys from the Socio-Economic Database for LAC (SEDLAC). This brief was produced by the Poverty Global Practice in the LAC Region of the World Bank.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Financial Protection Against Natural Disasters(Washington, DC, 2014)The primary objective of this report is to take stock of the global progress on financial protection against natural disasters over the last decade and bring together the latest thinking on disaster risk financing and insurance. Disaster risk financing and insurance helps minimize the cost and optimize the timing of meeting post-disaster funding needs without compromising development goals, fiscal stability, or wellbeing. Financial protection requires strong leadership by a country's ministry of finance. Disaster risk financing and insurance brings together disaster risk management, fiscal risk and budget management, public finance, private sector development, and social protection. While simple measures can quickly support improved financial protection, more complex financial solutions and institutional change require technical expertise and political will.