Protecting Fiji’s poor from the financial devastation caused by Unpredictable Events

July 15, 2010

[Suva, July 15] Micro insurance helps protect low income families from the financial shocks of unpredictable events. This important social protection measure is being spotlighted in Fiji by the Pacific Financial Inclusion Programme(PFIP) in partnership with the Reserve Bank of Fiji. Millions of very low-income households are already protected against unpredictable events such as the death of a family member, sickness, and even crop failure around the world and this event hopes to catalyze development here in Fiji.

Today, stakeholders were brought together at the Reserve Bank of Fiji to discuss the extension of insurance to low income households in Fiji. The event was an opportunity to exchange ideas and learn more about its potential for both low income households and insurance companies. The event was opened by the Governor of the Reserve Bank of Fiji Mr. Sada Reddy and was attended by representatives from insurance companies, commercial banks, microfinanceinstitutions and government officials.

Mike McCaffrey from PFIP presented on the importance of strong partnerships and innovative models to the development of this product in Fiji.

“Micro insurance works to decrease a family’s vulnerability to unpredictable economic shocks. It has the potential to increase social protection in Fiji while also being profitable for insurance providers,” he stated.

PFIP has conducted research to establish that there is opportunity for insurance providers to extend their services to low income and rural families. Currently it is estimated that approx 85,000 people have insurance policies in Fiji leaving almost 250,000 not protected from unpredictable events causing financial hardship. The potential for the insurance companies could amount to yearly claims value between FJ $11.6 and FJ $58 million dollars.

The Governor of the Reserve Bank of Fiji, Mr. Sada Reddy highlighted the benefits micro insurance could bring to all of Fiji.

“The development of this field, will help create a more stable and secure Fiji” continuing to say “ we totally support any initiative or pilot project in micro insurance, and hope that insurance companies take the initiative to explore the potential of this market,” remarked Mr. Reddy.

In addition to facilitating the development of micro insurance the event was also an opportunity for PFIP to launch its new website. The website provides an online presence for the programme to assist it in disseminating information about its Pacific wide projects and activities.

PFIP is funded by the UN Capital Development Fund (UNCDF), European Union, AusAID and the United Nations Development Programme (UNDP) and operates from the UNDP Pacific Centre.