What is the parametric climate and disaster risk insurance product?
The parametric climate and disaster risk insurance product is a weather index based insurance product that was officially launched by the Minister for Economy, Hon. Mr Aiyaz Sayed-Khaiyum in 2021 making it the first of its kind in the Pacific. The product aims to improve the financial preparedness and resilience of Fiji’s population that are most vulnerable to the devastating effects of a cyclonic event or natural disaster by providing a form of financial relief.
Who are the product developing and implementing partners?
The products have been developed by the Pacific Insurance and Climate Insurance Programme (PICAP) under the United Nations Capital Development Fund (UNCDF) in conjunction with the United Nations Development Programme (UNDP) and the United Nations University – Institute for Environment and Human Security (UNU – EHS). Both insurance products are underwritten by Fiji Care and Sun Insurance.
The product targets Fiji’s population whose income and livelihoods are most vulnerable to adverse weather conditions such as excess rainfall, high windspeed and cyclones.
How can a policy be purchased?
The products can be purchased through farmer cooperatives such as the Sugar Cane Growers Fund (SCGF), Sugar Cane Growers Council (SCGC), Cane Farmers’ Cooperative Savings and Loans Association (CCSLA), Fiji Rice Limited (FRL), Fiji Coconut Millers Pte. Limited (FCML) and the Tailevu Dairy Farmers Cooperatives Association (TDFCAL). Smart phone application is also a viable option for prospective individuals that are not members of these farmer cooperatives.
What are the type of policies available and how do they work?
There are two parametric insurance products currently available in the market. Both products provide a coverage of 12 months and payouts are admissible one month following policy commencement. It is also significant to note that multiple events are covered within one policy year (to a maximum of 100% of sum insured) and payments can be serviced digitally including MPaisa and MyCash wallet.
What has the Government done?
To make the product more affordable especially for the low income and vulnerable population of Fiji, the Fijian Government has provided a concession granting a Value Added Tax (VAT) exemption for premiums on climate and disaster risk parametric insurance product effective from 1 August 2021. In addition to this, the Fijian Government has also allocated funding for the premiums of 2,000 beneficiaries under the targeted social welfare parametric insurance scheme.
More information on the products can be found here.