Reaching new shores

Global Partnerships started the year by supporting the Pacific Catastrophe Risk Insurance Pilot, the first sovereign catastrophe risk transfer programme in the Asia-Pacific region. The governments of Marshall Islands, Samoa, Solomon Islands, Tonga and Vanuatu — home to almost 10 million people — are all taking part. The idea is to offer a way for these catastrophe-exposed governments to get around a difficult decision — tying up funds for an event that may not occur versus finding themselves without sufficient liquidity if disaster strikes.

Recovery efforts on Tonga following Cyclone Ian in January 2014.

Then in January 2014, the project received its first test. Cyclone Ian swept across the island of Tonga, killing one person, displacing thousands and causing tremendous devastation to crops and infrastructure. Shortly afterwards Tongaʼs government received a payment to help recover from the disaster, just as the project was designed to do.

The payment to Tonga comes less than a year since Swiss Re paid claims to the Mexicoʼs State Fund for Natural Disasters (Fonden), following the devastating hurricanes that hit that country both from the Atlantic and Pacific side. Swiss Re Global Partnerships is establishing a track record of reliability in helping governments to recover from such disasters. More nations are expected to join the Pacific Catastrophe Risk Insurance Pilot in 2014.

In Bangladesh Global Partnerships has joined forces with Oxfam GB and other partners to launch an index-based flood insurance product designed to lower flood risk and provide speedy insurance payout to river basin residents. Covering 1 660 families from 14 villages located in the Char areas of Sirajganj district, the families will receive a swift emergency payout if struck by floods. The pilot insurance programme will provide cash relief of up to approximately USD 100 per household.

In September Swiss Re announced its contribution to a USD 200 million fund raised by Leapfrog Investments, a specialist investor in emerging markets financial services, particularly insurance. Leapfrog typically invests in companies that bring insurance and similar financial products to people who earn less than USD 10 a day. As part of Swiss Reʼs strategy to support the development of insurance in high growth markets, the new investment vehicle will take stakes in companies offering insurance and related products and services to low-income consumers in Africa, South Asia and Southeast Asia.

Public entities and institutions in mature markets are also taking advantage of these solutions. Global Partnerships was able to offer a three-year programme for the Miami-Dade County Public School Districtʼs nearly USD 8 billion property programme. Such programmes provide much the same benefit to Miami-Dade officials as to the Pacific Islands — a tool for budget certainty, and an assurance of help in the event of a catastrophe.