Affordable insurance for climate vulnerability: Fiji Economy Minister

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Vulnerable communities will now be able to access affordable climate and disaster risk insurance following the launch of Fiji’s first-ever Parametric Microinsurance Product.

For $2 (US$1) a week, low-income Fijians will be able to access up to $1,000 (US$500) after a flood of cyclone.

Minister for Economy, Aiyaz Sayed-Khaiyum said climate emergency is here and the government saw climate and disaster risk insurance as one of the most sustainable shields of protection that can be offered to vulnerable communities.

“The Parametric Product offers two covers to help affected households respond to cyclones and flood risks. Both carry a maximum coverage of $1,000 with annual premiums of $100(US$50). That means for less than $2 a week a Fijian household that is vulnerable to the devastation of future storms can forge themselves a shield financial security. They will not wait for the government to pay them after a storm strikes. Assistance will be available to them very quickly.”

Sayed-Khaiyum said the Fijian government has worked tirelessly to develop this insurance solution that can extend a sustainable lifeline of financial security to the people on the frontline of future disasters

“The product had to meet three high-bars. It had to be affordable, fit for purpose and attractive to insurance agencies. Our work with the UNDP, UNCDF, Pacific Insurance and Climate Adaptation programme or PICAP since 2019 has led to the development of Fiji’s first-ever climate and disaster risk Parametric Micro Insurance product that is affordable enough to serve low-income individuals who cannot qualify for conventional insurance products and attractive enough to bring the private sector onboard.”

No Value Added Tax (VA)T will be charged on the Parametric Microinsurance Product and Sayed-Khaiyum said this will help improve affordability and market viability.

Sayed-Khaiyum said this insurance product is one part of a much larger role as the government is accelerating adaptation and ensuring national decisions and investments are climate sensitised.

He said this is why the government has supported the pilot of this Parametric Product by providing grant support to PICAP through the Government of Luxemburg.

SOURCE: FBC NEWS/PACNEWS