The Pacific Catastrophe Risk Insurance Company (PCRIC) and PNG DataCo have today signed an innovative parametric insurance policy to provide rapid payouts following earthquakes expected to result in damage to the submarine fibre optic cable network surrounding Papua New Guinea (PNG).
PNG DataCo is a state-owned enterprise (SOE) in PNG, offering wholesale services to the information and communication industry. It is tasked with constructing, owning and operating the critical national transmission network, including the installation and oversight of submarine fibre optic cables.
In the absence of suitable coverage from the private sector, the SOE approached PCRIC to explore the possibility of creating a bespoke insurance product to meet its specific needs. PCRIC, working closely with leading global advisory, broking and risk solutions company WTW and building on extensive discussions, research and analysis, developed and delivered a truly unique insurance solution, highlighting the advantages of parametric insurance as a way of providing financial protection when traditional insurance is not available.
The insurance coverage taken out will help protect PNG DataCo from the financial impact of earthquake damage, providing funds for rapid response to any damages, and ultimately helping to ensure any break in their vital services is minimised. This also boosts PNG’s disaster resilience, demonstrating the value of effective risk management for critical infrastructure.
PCRIC CEO, Mr. Aholotu Palu, stated that, “We are indeed proud of our efforts to work with PNG DataCo, persisting until we were able to table a fully tailored solution to their insurance challenge. Such coverage marks a significant turning point in the development of our capability to provide non-sovereign insurance products to state-owned entities within the Pacific Islands region.”
PNG DataCo CEO, Mr. Paul Komboi, expressed gratitude to the PCRIC team for their efforts in finalising the insurance policy agreement, noting that “PNG DataCo is very excited about the robust partnership now formed. We believe that this is a historic milestone for our region and a testament to our shared vision and commitment and look to continued engagement with PCRIC in the coming years. Our joint efforts truly showcases the merit of partnership and mutual commitment in addressing regional risk challenges. This is the first of its kind for Submarine Cable Systems in the world and we are extremely proud to be in the forefront of innovating this parametric insurance product for submarine cable systems during earthquakes and offer it to the rest of world.”
WTW Senior Director for Disaster Risk Finance, Dr. Simon Young, said, “This was truly a collaborative effort between PNG DataCo, PCRIC and colleagues across WTW’s Alternative Risk Practice. We were pleased to contribute our experience in designing bespoke parametric solutions, along with our expertise in risk analytics, to create an insurance coverage for critical infrastructure which meets both the needs of the client and the requirements of the international markets, where WTW ultimately placed the risk on PCRIC’s behalf.”
With this policy now in force, PNG will automatically become the newest member of the Pacific Catastrophe Risk Insurance Foundation (PCRIF). This provides PNG the opportunity to provide input into PCRIC’s strategic direction and product development, ensuring alignment with the country’s financial protection requirements.