Developing a Climate Risk Insurance for Pacific Islanders

October 4, 2019


Banana farmer in FIji

© UNCDF 2019 John Rae

Suva, Fiji – This October the Pacific Financial Inclusion Programme (PFIP) and the Munich Climate Insurance Initiative (MCII) will further assess the opportunities for setting up a climate adaptation and risk insurance programme in Papua New Guinea, Samoa, and Solomon Islands. The team will meet with a wide array of stakeholders, government representatives, meteorological departments, farmer cooperatives, financial services providers, and donors to understand their specific needs and identify opportunities for a comprehensive climate adaptation and disaster risk finance programme for Pacific Island states.

Extreme weather events and natural catastrophes have a great impact on the economies and livelihoods of Pacific Island Countries. With the changing of climate and the ever-growing intensity of natural hazards, having financial mechanisms in place to quickly cope with such events can assist in offsetting loss and damages.

A scoping study was thus conducted in February 2019 by PFIP and MCII to explore the possible implementation of climate risk adaptation and disaster risk financing mechanisms in the Pacific. One potential financial instrument is climate risk insurance, which pays out to beneficiaries quickly after a triggered event.

As a result of this study in Fiji, Vanuatu, and Tonga, PFIP and MCII are developing a new programme, which will be named, Pacific Insurance and Climate Adaptation Programme (PICAP) and aims to respond to the growing needs for disaster risk financing solutions for natural hazards in the region.

The PICAP implementation framework, which covers the need and demand for disaster risk financing, intervention logic, proposed workstreams, potential products to be developed as well as possible partnerships, was presented and discussed with stakeholders at a workshop on 1October in Suva, Fiji and Apia, Samoa on 3 October 2019. Similar sessions will be held in Solomon Islands and Papua New Guinea on 9 and 15 October 2019.

PICAP aims to help Pacific Island communities and governments better prepare for natural hazards through comprehensive disaster risk finance approaches, including climate risk insurance. PICAP will work across four workstreams:

  • Research and Risk Appraisal,         
  • Policy and Regulation,                 
  • Product Development and   
  • Consumer Empowerment.

The unique value proposition of the programme is to provide tailor made disaster risk finance solutions to micro, meso, and macro level beneficiaries. The programme will investigate how digital platforms can be leveraged for immediate and direct transfers to targeted vulnerable beneficiaries.

The scoping and feasibility study across six countries as well as the initial development of the PICAP is supported by the UNDP administered by the Disaster Resilience for Pacific Small Island Developing States (RESPAC) project.

About MCII

MCII is hosted at the United Nations University Institute for Environment and Human Security (UNU-EHS), in Bonn (Germany). This initiative is a leading innovation laboratory on climate change adaptation and disaster risk financing, specialized in innovative insurance related solutions. MCII is recognized among governments and policy processes like UNFCCC, ISDR´s Hyogo Framework, and in humanitarian work on climate risk management. MCII is a node among practitioners and scholars for innovative uses of risk transfer tools to manage climate risks. MCII develops innovations in two ways:

MCII pioneers concepts through its extensive expert network advocating for new ways of applying insurance to complement risk management and adaptation. Secondly, MCII tests risk transfer tools in “lighthouse” projects and provides proof of concept and implementation models for further replication. MCII feeds its results back to governments and decision makers, affecting regulations and enhancing international aspiration and standards. To provide this cutting-edge professional expertise, MCII works closely with private sector insurers and insurance associations, governments and regulators, delegates to UN policy processes, UN agencies and regional bodies, and scholars & practitioners of risk management and adaptation.


The Regional Disaster Resilience for Pacific Small Island Developing States (RESPAC) project is a UNDP-Russia funded partnership that works with partners, the private sector and governments to strengthen climate early warning systems and climate monitoring capacity, enhance preparedness and planning mechanisms and tools to manage disaster recovery processes, and increase the use of financial instruments to manage and share disaster related risk and fund post disaster recovery efforts.

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Naomi de Groot at