Tonga ups premium to US$1 million, securing US$17 million in cover against four major disasters.
Tonga has renewed its parametric reinsurance cover with the Pacific Catastrophe Risk Insurance Company, increasing the government’s premium from US $125,000 to US$1 million.
The updated policy includes protection against tropical cyclones, earthquakes, tsunamis and, for the first time, drought –providing a total cover of around US$17 million.
PCRIC CEO Aholotu Palu said “Tonga’s decision to increase its premium contribution marks a bold and proactive step in safeguarding its economic development through disaster risk financing. This enthusiasm demonstrates the government’s dedication to strengthening national resilience against the growing risks posed by climate change and natural disasters”.
The renewal follows a recent PCRIC mission to Tonga, where officials met the Prime Minister and Ministry of Finance to discuss enhancements to the disaster risk financing framework. Among updates were engagement with state‑owned enterprises and the tourism sector, donor partnerships, capacity‑building activities, contingency plan development, and a new strategic plan.
PCRIC recently appointed ex‑Finance Minister Tiofilusi Tiueti to lead the national contingency‑plan development, backed by a €2.5 million Global Shield grant. This effort complements the expanded insurance policy.
The drought‑inclusive policy is expected to take effect from 1 November 2025, aligning with past renewals. Tonga will continue working with PCRIC to implement contingency planning, engage SOEs, and roll out capacity‑building ahead of the new insurance year.
