Disaster risk financing in the Pacific: a landscape study of systems, instruments, and enabling conditions

The paper examines the governance architecture, enabling environment, available financial instruments, and the role of the Pacific Catastrophe Risk Insurance Company (PCRIC), drawing on an extensive desk review and consultations with 11 Pacific DMCs conducted in late 2025. Its primary purpose is to identify challenges, gaps, and opportunities to inform the design of a new ADB-managed DRF Multi-Donor Trust Fund.

The findings revealed that the Pacific DRF landscape is best described as instrument-rich but system-fragmented — a range of sovereign-level tools now exists, including parametric insurance through PCRIC, contingent credit from multilateral development banks, and grant-based mechanisms, yet disaster response continues to be dominated by reactive, ad hoc external assistance. Key systemic constraints include weak public financial management systems that delay fund disbursement, persistent gaps in risk data and analytics, limited financial protection below the sovereign level for households and businesses, and a complex governance structure involving roughly ten regional bodies whose overlapping mandates increase transaction costs for small island administrations. The study concludes that strengthening DRF performance requires not more instruments, but deeper integration of existing tools within national fiscal planning, budgeting, and accountability frameworks.