The government of India and the UN Office for South-South Cooperation (UNOSSC), through the India-UN Development Partnership Fund that they co-manage, recently agreed to contribute FJD 1.8 million (USD 850,000) to implement the Developing Climate Disaster Risk Financing Framework and Parametric Insurance program in Fiji. The funding is intended to mitigate the economic fallout of extreme climate and weather conditions by creating “index-based insurance and other climate disaster risk financing instruments for individuals, businesses and organizations…”. Index insurance is a mechanism by which covered individuals are reimbursed for losses when weather or other conditions exceed pre-established limits, rather than based on the losses of individuals.
As per Judith Karl, Executive Secretary of the UN Capital Development Fund (UNCDF), “the development of adequate financial and insurance tools that allow Pacific Islanders to better deal with economic shocks after a natural disaster will strengthen the resilience of people who are currently already facing the negative socio-economic impacts caused by COVID-19.”
The project will be led by the Climate Change and International Cooperation Division of Fiji’s Ministry of Economy, in partnership with UNCDF, the UN Development Programme (UNDP) and the Munich Climate Insurance Initiative (MCII). Founded in 2005, MCII is a Germany-based think tank focused on the role of insurance in climate-change policy in the developing world.
Established in 2017, the India-UN Development Partnership Fund works toward the UN Sustainable Development Goals in least developed countries, landlocked developing countries, and small-island developing states. As of May 2019, the fund has disbursed USD 48 million to 59 projects in 48 countries.
By Romil Pandey, Research Associate
Sources and Additional Resources
Pacific Financial Inclusion Program press release
http://www.pfip.org/newsroom/programme-update/2020-2/india-pledges-fj-1-9-million-towards-developing-climate-disaster-risk-financing-in-fiji/
United Nations Office for South-South Cooperation homepage
https://www.unsouthsouth.org/
The India-UN Development Partnership Fund webpage
https://www.unsouthsouth.org/partner-with-us/india-un-fund/
MCII homepage
https://climate-insurance.org/
UNDP homepage
https://www.undp.org/
UNCDF homepage
https://www.uncdf.org/
UN Sustainable Development Goals webpage
https://www.un.org/sustainabledevelopment/sustainable-development-goals/
Past MicroCapital brief on insurance in Fiji
https://www.microcapital.org/microcapital-brief-fiji-ifc-partnering-on-access-to-insurance-against-cyclones/
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