Samoa receives $285,000 parametric payout after tsunami from Russian quake

By Henry Gale

Aug 13 - (The Insurer) - Pacific Catastrophe Risk Insurance Company (PCRIC) has paid $285,000 to the government of Samoa after its parametric insurance policy was triggered by tsunami warnings following the magnitude 8.8 earthquake in Russia's far east on July 30.

The earthquake had initially sparked evacuation orders in Japan, Hawaii, other Pacific Islands and the U.S. West Coast amid fears of destructive tsunami waves. The international insurance impacts were expected to be minor after waves did not appear to cause large-scale damage outside eastern Russia.

Samoa has a parametric insurance policy with regional risk pool PCRIC covering tropical cyclones, excess rainfall, earthquakes and tsunamis. The tsunami portion of its policy, developed ahead of PCRIC's November 2024 renewals, triggers payouts based on tsunami threat warnings being issued by the Pacific Tsunami Warning Center.

Speaking to Parametric Insurer last November, PCRIC chief risk officer Richard Poulter explained: "The thinking is that if a country is at threat of a tsunami, then action will be taken by the government: there will be evacuations and there will be costs incurred regardless of whether that tsunami actually materialises or not."

In this case, there have been initial reports of tsunami damage in some of Samoa's coastal villages along the northeast coast of Upolu, PCRIC said.

Samoa's finance minister Lautimuia Afoa Vaai said the payout affirms the importance of risk pooling and financial preparedness for natural hazards. "I strongly encourage other Pacific members that yet to join, to also partner with PCRIC," he added.