After the storm - innovative disaster response

An innovative insurance scheme – where policy holders are paid out immediately when wind or rain levels reach a certain extreme level – is helping vulnerable Pacific communities prepare better for the impacts of climate change.
An image of a woman, Copra farmer Tamari Bulabalavu, standing for a photo with natural greenery in the background..
Copra farmer Tamari Bulabalavu says protection from loss of income after a cyclone is important for her third-generation family business. Photo: UNCDF.

Small farmers and business-owners are particularly exposed to the risks of cyclones and floods. They don’t have the financial buffer to fund their own recovery after losing crops and stock, and they can’t wait for assessments and compensation to be paid – even if they have insurance.

Most people in the Pacific don’t have any form of insurance – despite high exposure to natural hazards.

The solution now on offer is a new kind of cover: parametric weather-indexed micro-insurance products. The policies are sized to be affordable, and importantly, they pay out immediately after a disaster.

There’s no damage assessment process, and no travelling to physical insurance branches to claim payments. That’s the weather-indexed part: the payment is triggered as certain levels of rainfall or wind-speed are recorded, and is received within a week directly into the policy-holder’s bank account or mobile money wallet.

Breakthrough partnership with private finance

The climate and disaster risk insurance is being delivered through the Pacific Insurance and Climate Adaptation Programme (PICAP), working closely with the Government of Fiji and other private and public partners. It has been hailed as a breakthrough in working with the private sector to leverage finance for development.

The weather-indexed micro-insurance has been on offer to Fiji’s most vulnerable communities since August 2021, including farmers, fishers, market vendors, and small businesses. It provides cover up to FJ$1,000 (~US$500) for cyclonic storms.

Private insurers – FijiCare, Sun Insurance and Tower Insurance – have signed on as underwriting partners of the programme and will ultimately be responsible for processing pay-outs. FijiCare and Sun Insurance have reported take-up by over 1,300 families. Two new products will be introduced in August 2022, including cover for people on a social welfare benefit. The aim is to scale the new product to over 4000 people in 2022.

There are payment schemes set up by some producer cooperatives to help spread the load of the cover purchase cost, and also financial literacy training provided alongside.

The aim is for communities who have survived without a financial safety net to be better prepared to recover from storms. Being financially prepared supports faster post-disaster recovery, rebuilding of livelihoods, and improved levels of resilience.

Watch the explainer video here (5:19 mins)

The South Pacific is in the midst of the annual tropical cyclone season, with Vanuatu facing down TC Dovi imminently and a predicted system developing towards Fiji in the next few days.

Our partners

The Pacific Insurance and Climate Adaptation Programme (PICAP) is a joint initiative of the United Nations Capital Development Fund, the United Nations Development Programme, and the United Nations University, Institute for Environment and Human Security.PICAP will launch pilot schemes in Tonga and Vanuatu later in 2022, with plans for expansion into Papua New Guinea, Samoa, and the Solomon Islands later.

The regional programme provides climate and disaster risk financing solutions to help Pacific governments and communities address impacts of climate change. The programme is funded by Aotearoa New Zealand, as well as Australia, India, and Luxembourg.

For more about PICAP and the UN Capital Development Fund, see the programme website(external link)

A group of people stand for a photo to be taken of them working on the Copra farms..
Copra farming directly or indirectly supports 100,000 farmers and remains an important component of Fiji’s economy, but farmers like the Bulabalavu family on Vanua Levu have had few options to manage the ever-present risks of cyclones and flooding. Photo: UNCDF.


We use cookies and other tracking technologies to improve your browsing experience on our website, to analyze our website traffic, and to understand where our visitors are coming from. You can find out more information on our Privacy Page.