November 25, 2017
Lautoka, Fiji – The Pacific’s first bundled insurance product was officially launched in Fiji today covering 12,500 sugarcane farmers.
FijiCare Insurance Limited announced the launch in partnership with the United Nations – Pacific Financial Inclusion Programme (PFIP) and the Sugar Cane Growers Fund (SCGF).
“Bundled” Insurance offers consumers added convenience and potential cost savings by combining multiple insurance coverages in one package, one insurance policy. It includes a term life, funeral expenses, buildings and personal accident coverage at a standard, low and affordable price.
Through a PFIP grant of USD $77,890, FijiCare upgraded its policy administration, financial and claims management systems so that the new microinsurance can be provided efficiently and at a low cost. The bundled insurance has a combined cover limit of FJ $10,000 per insured person for a cost, or premium of FJD $52 per year ($1 a week). The premium will be paid over three years by the SCGF as aggregator in an effort to explain and instill the benefits of being protected by insurance and to encourage farmers to take up insurance themselves upon completion of this period.
The $10,000 limit covers:
1) Life and Funeral (up to age of 65) – FJ $4,000.
2) Personal Accident (up to age of 65) – Maximum FJ $3000
3) Fire – Maximum FJ $3,000
Sugarcane farmers were covered under the group microinsurance scheme from July and since then have already filed 28 claims amounting to FJD $108,000. These include two fires and 26 death – funeral claims. All claims were processed with the assistance of SCGF, whose core function is to provide affordable loans to sugar cane growers. To expeditiously settle claims FijiCare and SCGF have an arrangement whereby upon approval by FijiCare, SCGF settles the claims to the beneficiary and gets the amounts reimbursed. SCGF is supporting the initiative by providing awareness on the insurance to its members, helping farmers fill out the necessary claims documentation and providing an easy payment mechanism.
Managing Director of FijiCare Insurance Limited Peter McPherson, said “FijiCare is determined to offer insurance products that are both affordable and easy for customers to access and benefit. We have streamlined the application process, claims management and settlement process so that turnaround time is reduced and we are aiming to pay claims within three to five working days.
He added that although the benefit levels and sums insured may be modest, we must remember that any microinsurance can and will help people to cope in times of need.
“This microinsurance product really has great potential and we will be working hard to roll it out to employers, unions, associations, co-operatives and other groups across Fiji,” he said.
PFIP Acting Programme Manager Krishnan Narasimhan said that the PFIP was working with insurance providers across the region to develop affordable and appropriate insurance products for clients in the low-income segment.
“With Pacific Island Countries having some of the lowest insurance penetration rates in the world, we are indeed excited about the 12,500 farmers who have received insurance coverage for the first time. This is a big step in the financial inclusion push in the region and we acknowledge and are grateful for the persistence and determination of FijiCare Insurance and the Sugarcane Growers Fund in making this possible,” he said.
“This microinsurance initiative marks an important step towards expanding sustainable financial inclusion. For the farmers, enrolment into the insurance scheme is the beginning of a journey that gives more protection, builds household resilience and that generates tangible value as they use the service to improve their daily financial lives,” added Mr. Narasimhan.
The microinsurance product is being marketed to various sectors (e.g. garment, hardware, tourism, retail etc.) and targeted at large and medium businesses that have a minimum number of 50 employees or members. The SCGF is the first group to work with FijiCare on the microinsurance.
Going forward, PFIP will be assisting FijiCare through a Human Centred Design – Innovation Lab model to ensure that a strong customer base can be established that makes the product commercially viable, scalable and replicable across Pacific markets.
It is FijiCare’s intent to distribute the bundled insurance product in Vanuatu next, once the product has been established in Fiji and sufficient market share has been reached.
PFIP is a Pacific-wide programme that has helped 1.78 million low-income Pacific islanders gain access to financial services and financial education. It achieves these results by funding innovation with financial services and delivery channels, supporting policy and regulatory initiatives, and empowering consumers.
PFIP operates from the UNDP Pacific Office in Suva, Fiji and has offices in Papua New Guinea, Samoa and Solomon Islands. It is jointly administered by the UN Capital Development Fund (UNCDF) and the United Nations Development Programme (UNDP) and receives funding from the Australian Government, the European Union and the New Zealand Government.
This project is one of PFIP’s many regional efforts to increase the use of financial instruments to manage and share disaster related risk and fund post disaster recovery efforts of the UNDP-Russia funded – Regional Disaster Resilience in the Pacific Small Island Developing States (RESPAC).
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