Approximately 5,000 households in Fiji that are vulnerable to climate change will soon gain access to climate risk insurance products through a collaboration involving the Reserve Bank of Fiji (RBF), SUN Insurance Company Ltd, Tower Insurance, and the Germany-funded InsuResilience Solutions Fund (ISF).
This partnership will offer parametric insurance coverage, designed to provide financial support in response to the detrimental impacts of climate-related events, enabling quicker recovery and bolstering the long-term financial stability of these households.
RBF Governor Ariff Ali expressed enthusiasm for the project, highlighting the recent recognition of RBF with the Nestor Espenilla Jr Financial Inclusion Innovation Award at the 2024 Alliance for Financial Inclusion Global Policy Forum Awards. He noted that this accolade underscores the successful implementation of current parametric insurance products, which the organization is now looking to expand.
The initiative aligns with the National Financial Inclusion Strategy 2022-2030, aimed at empowering Fijians to cultivate resilient and sustainable livelihoods and enterprises through improved financial inclusion.
Parametric insurance is specifically structured to provide rapid payouts based on predetermined weather conditions, such as specific rainfall amounts or wind speeds, ensuring that support is timely and facilitating swift recovery efforts when needed most.
Tarlochan Singh, principal officer of SUN Insurance, expressed excitement about participating in the project, stating that the goal is to make climate risk insurance both accessible and effective, thereby protecting livelihoods and businesses from the uncertainties posed by climate change.
Joseph Magnus, country manager for Tower, emphasized their long history of protecting Fijian communities with insurance, stating that through this new partnership and the introduction of parametric insurance, they aim to enhance insurance awareness and accessibility for even more Fijians.
The ISF, managed by Frankfurt School of Finance & Management and funded by the German development bank KfW, is dedicated to fostering innovative and sustainable climate risk insurance products, improving the resilience of vulnerable households to the effects of climate change and natural disasters.
This initiative, titled “Introducing New and Scaling Up Existing Climate Risk Parametric Insurance Products in Fiji,” is set to run for two years, commencing on August 1, 2024, and will also work alongside partners such as the Fiji Crop and Livestock Council and The Sugar Cane Growers Council.