Two new parametric micro-insurance products to build financial preparedness and disaster risk resilience for Fiji’s most vulnerable communities
The UN Capital Development Fund [UNCDF] has introduced two new parametric micro-insurance products to the Fiji market in yet another milestone achievement under the Pacific Insurance and Climate Adaptation Programme.
Both products offer combined insurance cover against heavy wind and rainfall and are designed to offer immediate financial support after extreme weather events.
For Fiji’s most vulnerable communities, including farmers, fishers, market vendors and small businesses, it will be an important tool to build their financial preparedness and disaster risk resilience.
The second product, while covering the same risks, specifically targets Department of Social Welfare recipients living in high climate risk locations and will be rolled out in partnership with the Fijian Ministry of Women, Children and Poverty Alleviation and the World Food Programme.
Minister for Economy and Minister responsible for Climate Change, Aiyaz Sayed-Khaiyum, said: “For farmers, market vendors and others living in climate risk areas, immediate access to funds after a disaster can mean the difference between a livelihood saved and abject poverty. Government has had to remain agile and innovative to ensure communities are able to withstand and adapt to the dire impacts of the climate emergency. With UNCDF and the private sector, Government has used parametric micro-insurance to make rapid funds accessible for nearly 1400 Fijians in 2021. We’re aiming to reach another 4000 vulnerable people in 2022.”
The ambitious target is to sign up 4,000 people in partnership with local insurers, FijiCare and Sun Insurance, a significant scale up from the initial 1,388 beneficiaries already covered last year.
The products, backed by customer facing research and evidence, have been developed through technical assistance from UNCDF with inputs and feedback provided by a range of partners and stakeholders.
The new products address a significant development challenge and market gap for access to appropriate and affordable climate disaster risk insurance.
The New Zealand High Commissioner to Fiji Charlotte Darlow said: “We are very pleased to support the UNCDF Pacific Insurance and Climate Adaptation Programme given the alignment of the programme’s objectives with our own commitment to support the priorities of our Pacific partners. In the 18 months since inception of the programme, UNCDF has catalysed the market players and leveraged the potential of the private sector to deliver innovative solutions.”
Krishneil Narayan, New Zealand’s Senior Development Advisor for Climate Change in Fiji, said: “These new products will improve the financial preparedness of climate vulnerable communities and social welfare recipients through the introduction of affordable insurance covers against the damages caused by cyclones which were not available to them before.”
Building on the existing micro-insurance products launched exactly a year ago, the two new insurance schemes come with enhanced features, including options for increased payout and coverage for multiple events within one policy year.
The Programme will soon launch pilot schemes in Tonga and Vanuatu as part of its ongoing regional expansion plans and plans are also underway to expand to Samoa, Papua New Guinea and Solomon Islands from 2023.
Chargé d’affaires of the Australian High Commission in Fiji, Paul Wilson, said insurance is a critical tool that will help increase the ability of Pacific households and businesses to recover from severe weather which promotes both financial and physical resilience.
“Financial security against the impact of severe weather, such as cyclones, promotes a level of independence and it also allows people and governments to direct limited resources to risk management, adaption programmes and rebuilding critical infrastructure,” he said.
This story was originally published at UNCDF on 29 August 2022 by Sheldon Chanel, reposted via PACNEWS.