Fiji has launched its first climate risk parametric insurance product for micro, small and medium enterprises (MSMEs), giving businesses faster access to financial support when defined climate triggers are reached.
The locally underwritten commercial product was launched by Tower Insurance Fiji with support from the United Nations Capital Development Fund (UNCDF) and the Asian Development Bank (ADB).
The product is designed to help small businesses recover more quickly after climate-related shocks by providing payouts when pre-agreed climate conditions are triggered.
Unlike traditional insurance, parametric insurance provides payment based on a predefined event or measurement, rather than waiting for a detailed assessment of individual losses.
The product was developed using feedback from 851 MSMEs surveyed through work led by Fiji’s Ministry of Commerce and Business Development.
The findings were used to ensure the insurance product reflects the needs and challenges faced by small businesses.
UNCDF said the initiative forms part of its work to expand inclusive finance for MSMEs and strengthen private-sector-led climate resilience in Small Island Developing States.
The initiative also involved the Reserve Bank of Fiji and the Fiji Government, alongside community development organisations and private-sector partners.
It is being implemented under the Pacific Insurance and Climate Adaptation Programme (PICAP), jointly administered by UNCDF, the UNDP Pacific Office in Fiji and United Nations University–Institute for Environment and Human Security.
PICAP receives support from the Australian Government, New Zealand Ministry of Foreign Affairs and Trade (MFAT) and the Asian Development Bank (ADB).
The launch marks a new approach to helping Fiji’s small businesses manage financial risks from climate-related events and strengthen their capacity to recover from future shocks.
