Many across the Pacific, particularly those who are in the most vulnerable populations, do not have access to appropriate or affordable insurance products. Insurance acts as a safety net for households and, in times of crisis can provide people with much-needed funds to help them recover from insurable events and to re-establish their livelihoods.
In many developing countries there have been moves to develop affordable and appropriate insurance products for clients in the low-income segment. These products, often defined as micro-insurance or inclusive insurance, can be offered by licensed insurance providers to match the demand and risk exposures of the large uninsured segment.
It appears that Pacific Islanders who are most vulnerable to economic shocks are currently the least able to be insured. PFIP and its partners have been working to introduce insurance products that target low-income households in the Pacific and so help make the insurance market more inclusive in the region.
PFIP has been actively working to promote enabling regulatory policies, support insurers and intermediaries, and to expand the understanding of insurance concepts through financial literacy activities. From a policy perspective, PFIP has been working with insurance supervisors to enhance their capacity in the areas of supervision, inclusive insurance, risk management and industry collaboration. This has led to progress being achieved that helps to put in place well-regulated and evolving inclusive insurance markets.
To assist in identifying potential opportunities, PFIP has supported the process to identify the risk priorities of low-income households through Demand Side Survey research studies in Samoa, Fiji and the Solomon Islands. PFIP has also provided performance based grants and technical assistance in the areas of market research, product design and partnership enablement of delivery channels which has led to five microinsurance pilots and the roll out of microinsurance via digital channels in Papua New Guinea.
PFIP has developed a variety of videos and communication material to help inhabitants of Pacific countries to better understand insurance, its benefits and how it can be used. PFIP has also worked with the Reserve Bank of Fiji to develop a national campaign to drive insurance awareness and education. The campaign was so successful in 2016 that the Insurance Council made up of the insurance industry representative decided to run the campaign again in 2017. An independent impact assessment was conducted to determine the impact of this campaign. The market feedback conducted by Tebbutt Research found that following the Insurance Awareness Fiji campaign, 81% of Fijians (4 out of 5) surveyed reported that they now think more positively about insurance with 30% now very likely to buy insurance in the next 12 months (compared with just 22% before the campaign).
Also within this period, PFIP worked with the Insurance Council of Fiji to develop a ‘bundled insurance’ concept a first for Fiji and the Pacific. This proved difficult to get off the ground as many insurance companies faced approval issues and could not get passed a call for government subsidies and administration. By mid 2017, FijiCare took the leap and partnered with PFIP and the Fiji Sugarcane Growers Fund to cover 12,500 sugarcane farmers. In 2018, PFIP hopes to work provide similar cover for more industries.