Titilia Rokoiro and Monika Seicakau are two smallholder farmers living in Fiji’s flood-prone Western Division who have had their fair share of troubles from the vagaries of the weather.

Floods and cyclones have damaged income-generating assets and property with some regularity over the years, and the need for a financial solution to help them cope with the impacts was urgent.

The two women then learned about a novel parametric micro-insurance scheme from the news media that paid out funds based on ‘trigger’ events such as tropical cyclones and excessive rainfall.

They immediately signed up for the rainfall cover through the Cane Farmers’ Co-Operatives Savings and Loans Association Limited (CCSLA) and received a payout in February this year following excessive rain over a five-day period in late January.

“I have invested in this [microinsurance scheme] and I feel that it has helped my family a lot. If a cyclone or flood occurs, I receive a [financial] top-up,” said Ms Seicakau.

At the 28th Conference of the Parties to the UN Framework Convention on Climate Change (COP28), which was held in the United Arab Emirates from November to December 2023, Pacific nations have called for “more action, more ambition and more urgency” to tackle the climate crisis.

These demands include calls for more investments in climate adaptation solutions, such as parametric insurance, that help the most vulnerable cope better with the impacts of natural shocks.

Climate risk insurance is increasingly being seen as a tool to strengthen the financial resilience and preparedness of climate-vulnerable individuals and households against extreme weather events.

Developed by the UN Capital Development Fund’s (UNCDF) Pacific Insurance and Climate Adaptation Programme (PICAP), and offered in the market by local insurers, the product’s introduction means that many in region can for the first time access affordable insurance protection against weather hazards.

Gender equality and social inclusion is at the centre of the Programme’s work, in recognition of the disproportionate burden women bear during climate-related disasters.

In January and February 2023, the excessive rainfall over a five-day period in Fiji’s western division triggered payouts to 1,013 insured beneficiaries, with 38% of them being women and 20.2%people with disabilities.

For Ms Rokoiro and Ms Seicakau, the quick injection of funds was a “lifeline” in a most difficult time, assisting with recovery and placing them on better footing to deal with future climate shocks.

Titilia Rokoiro, smallholder farmer [Tavualevu Village, Tavua]

The key features of the product include the quick processing of the payouts sent directly through e-channels such as mobile money to the policyholder, with no need to verify the losses. Policy holders qualify for payments of up to $FJ1000, with the premium capped at 10% per annum.

These features appeal to Ms Rokoiro, a housewife and mother from Tavua, who said cyclones and floods have long been a challenge for her and her family.

Ms Rokoiro said that the recovery could take a few years in normal circumstances, as assistance following such disasters was usually delayed due to a range of factors.

With parametric microinsurance, she has received two payouts already, both within 14 days of a cyclone and a rainfall event, through her mobile money account.

“I used most of the money to buy new beddings and renew my insurance for the next season. The remaining money I used for my family’s needs such as food items,” she added.

Drawing from this personal experience, Ms Rokoiro believes this product provides women with the financial security and independence, while enhancing their knowledge about insurance more broadly.

Monika Seicakau, farmer [Vuda, Lautoka]

Ms Seicakau, a small-holder farmer and market vendor from Lautoka, is another example of how access to parametric insurance can strengthen the financial resilience of women.

She is a policy-holder of the PICAP-developed product, with 50% of her premium subsidised by UN Women through the Market for Change partnership, which it implements with UNDP, with support from the Governments of Australia, Canada and New Zealand.

“Before getting the parametric insurance, I would not have few avenues of recovery. Once my crops are damaged, I immediately suffer financial losses,” Ms Seicakau said.

Ms Seicakau says that the microinsurance product brought her much-needed relief from the persistent rainfall and its subsequent economic losses which accumulate with each passing year.

“I want to encourage all women to join this microinsurance initiative. If a cyclone or flood occurs, I immediately make financial recoveries. It provides good support.”

Group Aggregation Model

Distributing such a novel product to smallholder farmers in a country known for low rates of insurance uptake was always going to be a challenge.

A recent Financial Services Demand Side survey indicated that only 15% of the adult population in Fiji have access to some form insurance, with most of them concentrated in urban areas.

The Programme opted for a group-aggregation model, engaging in partnerships with local cooperatives and agri-agencies to gain access to and insure their members.

This strategy allowed PICAP to reach many people with minimal effort and, crucially, link up these agencies with private insurers.

One ‘aggregator’ partner was CCSLA, one of the largest cooperatives in Fiji looking after the financial interests of canefarmers who drive the country’s important sugar industry.

Its membership base includes a large number of women farmers, including Ms Rokoiro and Ms Seicakau, and, according to CCSLA Project Lead, Losana Kumar, the parametric product has helped strengthen the financial security of its members.

“It is very important that they take up this [insurance] cover so that when the [financial] help arrives, they are ready and know where to use those funds accordingly in order to get their families back on track,” Ms Kumar added.

Conclusion
Parametric micro-insurance is reshaping the landscape of financial options available to women in Fiji and is helping build resilience against extreme weather events in a cyclone and flood-prone nation.

The success of parametric micro-insurance in Fiji has led to increased demand for other product offerings, such as meso-level parametric insurance for organizations and businesses and anticipatory action products that payout before an event hits.

This highlights a clear role for climate and disaster risk insurance more broadly in strengthening climate adaptation efforts in Fiji and other Small Island Developing States (SIDS).

Article 8(4) of the Paris Agreement identifies insurance as an area that holds much promise to address the impacts of climate change.
Fiji’s experience with parametric insurance lends credence to this suggestion and strengthens the case for expansion into other climate-vulnerable nations of the world.