Insurance broker Howden has teamed up with the UN Capital Development Fund (UNCDF) to help fight climate change within the Pacific.
A press release notes that the international insurance intermediary has partnered with UNCDF’s Pacific Insurance and Climate Adaptation Programme (PICAP) to support Fiji’s vulnerable communities, to build resilience and financial preparedness against climate shocks.
The flagship programme has developed and deployed the Pacific region’s first parametric microinsurance products in Fiji, Tonga and Vanuatu.
Through its private insurer partners, FijiCare, Sun Insurance and Tower Insurance, PICAP has developed two products for the Fiji market that cover losses from heavy wind and rainfall related events. Both of the products offer pay-out options of FJ$1000 (US$500), FJ$2000 (US$1000) and FJ$3000 (US$1500), with a VAT-free premium of 10% per annum.
During the first two weeks of 2023, Fiji experienced heavy amounts of rainfall, which resulted in a trigger payment of the parametric insurance product.
The payments were transferred digitally to 536 beneficiaries. The payments were received into their mobile wallets approximately 10 days after receiving the final verified data from the Fiji Meteorological Office and the index monitor, therefore clearly demonstrating the values of parametric risk transfer.
Additionally, Howden has also provided subsidy support for the premiums of beneficiaries most vulnerable to damage from tropical cyclones and floods. This included smallholder farmers, fishermen, market vendors, female-headed households, and people with disabilities.
“Rising global temperatures are causing an increase in the frequency and severity of disasters, which is putting disaster relief funding models under significant pressure. The private sector has the expertise, resources, and now proven models that have the potential to transform how disaster relief is funded,” commented David Howden, CEO, Howden Group.
“We are proud to support the UNCDF and its partners on the PICAP and hope to see programmes like this playing a much bigger role in disaster relief funding strategies. But climate change isn’t hanging around; we need to scale this model, and fast.”
Howden’s support aligns with UNCDF’s global strategy of rallying private sector support and resources for development initiatives that help uplift last mile communities in developing countries around the world.
Krishnan Narasimhan, UNCDF’s Global Lead Specialist for Climate Risk Insurance and PICAP Programme Manager, added: “Although the parametric microinsurance offered in Fiji is market-based, the most vulnerable and low-income households require premium subsidy towards this. Howden Group’s commitment to making this kind of insurance more accessible to those communities most vulnerable to climate-related disasters is indeed welcome and commendable.”
