Fiji signs MOU for cyclone insurance to cover most vulnerable citizens

Fiji signs MOU for cyclone insurance to cover most vulnerable citizens

IFC, a member of the World Bank Group, and the Fijian Government have signed an agreement that paves the way to help the country’s disadvantaged families and farmers gain access to an insurance payout in the event of a severe cyclone.

Under the plan, IFC is working on an insurance scheme for disadvantaged families and farmers, whose homes would normally be considered uninsurable. Depending on the severity of the wind speed striking a province, the aim is for registered households to receive a cash payout to their bank account, or a voucher to help them rebuild and recover quickly from the damage.

“Fiji is highly susceptible to natural disasters, particularly cyclones, and we know that 94 percent of homes in the Pacific Island nation are currently uninsured against tropical cyclones,” Stoiljkovic said. “There is clearly a case for a bigger insurance market in Fiji, and IFC sees this initiative as a significant first step in spurring new insurance products. We look forward to working with the government and the private sector on this important initiative.”

The initiative comes after an assessment of the devastation left by category five Cyclone Winston in 2016, which caused an estimated US$900 million in damages and losses. Overall economic losses from Cyclone Winston, the most intense tropical cyclone ever experienced in the southern hemisphere, amounted to almost one third of the country’s GDP. The assessment showed 78 percent of damages and loss were borne by the households and agriculture sector, with less than three percent of those losses insured.

With the frequency and severity of climate-related disasters continuing to rise in the Asia Pacific region, IFC has been working with the private sector to help combat the challenges and build up resilience through innovative and accessible insurance products.

Original source: IFC
Published on 17 October 2019